Don Juan Company Provided the Following Information Regarding Its One

question 61

Multiple Choice

Don Juan Company provided the following information regarding its one and only product-ice skates. $\begin{array}{ll}\text { Direct materials used } & \$ 300,000 \\\text { Direct labor } & 180,000 \\\text { Fixed overhead } & 100,000 \\\text { Fixed s elling and administrative costs } & 150,000 \\\text { Variable overhead } & 120,000 \\\text { Variable selling and administrative } & 60,000 \\\text { Selling unit price } & 75 \\\text { Units produced and sold } & 10,000\end{array}$ is the total manufacturing cost if the contribution approach is used.

• A) $480,000
• B) $420,000
• C) $600,000
• D) $300,000

---

Definitions:

Required Rate

The minimum return that investors demand for investing in a particular asset, reflecting the risk of the investment.

Discounted Payback Period

A capital budgeting method that calculates the amount of time needed to break even from an investment in present value terms, factoring in the time value of money.

Discount Rate

In discounted cash flow analysis, it's the rate of interest used for calculating the present day value of future financial inflows.

Cash Flows

The sum of all money transactions both incoming and outgoing in an establishment, affecting its ability to maintain liquid resources.