Vicade Has 1,000 Commercial Video Game Machines in Inventory Produced

question 74

Multiple Choice

Vicade has 1,000 commercial video game machines in inventory produced at a cost of $400 each (60% variable and 40% fixed) . The machines were to have been sold for $1,000 each. However, the machines currently contain a minor malfunction reducing their selling price to $150 each. The company could correct the malfunction at a variable cost of $250 each and then sell the machines for $550 each.
If the games are reworked, what will be the contribution per unit from doing so?

• A) $350
• B) $300
• C) $150
• D) $100

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Definitions:

Pro Forma Financial Statements

Financial statements that project what a firm’s financial condition will be in the future.

Income Statements

Financial statements that show a company's revenue, expenses, and profits over a specific period of time, typically a quarter or a year.

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Financial statements that present all line items as percentages of a common base figure, facilitating comparison across periods or companies.

Actual Transactions

The completed deals or exchanges of goods, services, or financial instruments between parties.