The Marx Brewing Company Recently Installed a New Bottling Machine

question 32

Essay

The Marx Brewing Company recently installed a new bottling machine. The machine's initial cost is $2,000, and can be depreciated on a straight line basis to a zero salvage in 5 years. The machine's per year fixed cost is $1,800, and its variable cost is $0.50 per unit. The selling price per unit is $1.50. Marx's tax rate is 34%, and it uses a 16% discount rate. If Marx sells 2500 units what is the accounting profit and contribution margin for Marx Brewing?

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Definitions:

SMEs

Small and Medium-sized Enterprises, typically defined by their employee count, annual revenue, or assets, contributing significantly to economic development and innovation.

Revenues

The total amount of money received by a company from its various activities, typically from sales of goods or services, before any expenses are subtracted.

Creativity

The capacity to generate unique and inventive concepts, or to create something innovative and imaginative.

Action Orientation

A proactive attitude that focuses on taking immediate and decisive steps towards achieving goals.