A Proposed Project Has fiXed Costs of $3,700, Depreciation Expense

question 339

Multiple Choice

A proposed project has fixed costs of $3,700, depreciation expense of $1,400, and a sales quantity of 1,500 units. What is the contribution margin if the projected level of sales is the accounting break-
Even point?

• A) $2.47
• B) $2.64
• C) $3.10
• D) $3.40
• E) $3.71

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Definitions:

Customer Service Department

A division within a company that handles inquiries, complaints, and support requests from customers.

Capacity Analysis

Calculating the production capacity an organization needs to fulfill the dynamic demands for its products.

Time-Driven

A method or approach that bases calculations, actions, or operations on the passage of time, often used in costing and scheduling.

Activity-Based Costing

A costing method that allocates overhead costs based on each product's activities or consumption rather than a standard rate.