Harp Widgets Determined Each Deluxe Widget It Produces Has a Unit

question 35

Multiple Choice

Harp Widgets determined each deluxe widget it produces has a unit variable cost of $15.00, with total fixed costs of $600,000 for the period.Harp expects to sell 60,000 deluxe widgets and has applied a markup percentage of 35%.What contribution margin will Harp earn from the sale of each deluxe widget?

• A)$33.75
• B)$8.75
• C)$18.75
• D)$25.75

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Definitions:

External Good

Often misinterpreted; should likely be "external good," relating to positive externalities, benefits received by those not directly involved in a transaction.

Nonrival-in-consumption

A property of a good whereby one person's consumption does not diminish the utility of that good for others.

Consumption

The process by which goods and services are used up by consumers, reflecting the end use of products and services in an economy.

Nonpaying Customers

Individuals or entities that receive goods or services without providing payment or compensation.