A Computer Manufacturer Sells 1,000 Units Per Month at $500

question 183

Multiple Choice

A computer manufacturer sells 1,000 units per month at $500 each.A price cut to $400 is being considered.His marginal cost is constant at $300 per unit.To maintain profits, quantity sold must increase to at least

• A)1,500
• B)2,000
• C)2,500
• D)3,000

Understand the implications of lean manufacturing on production setups and batch sizes.

Recognize the impact of lean manufacturing on accounting systems.

Understand the risks associated with implementing lean principles in manufacturing.

Understand the differences between lean and traditional manufacturing environments.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.

T-Account

A visual representation of a ledger account that helps in understanding the effects of transactions on each account.

Raw Materials

The basic, unprocessed materials required in the manufacture of goods, often transformed through the production process.

Job-Order Costing

A costing method used to allocate costs to specific jobs or orders, tracking the expenses associated with each job individually.