A Proposed Project Has Fixed Costs of $39,480, Depreciation Expense

question 37

Multiple Choice

A proposed project has fixed costs of $39,480, depreciation expense of $8,724, and a sales quantity of 1,330 units. The total variable costs are $5,607. What is the contribution margin per unit if the projected level of sales is the accounting break-even point?

• A) $37.81
• B) $34.63
• C) $36.24
• D) $35.16
• E) $38.13

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Definitions:

Long-Term Debt Ratio

A financial ratio that shows the proportion of a company's long-term debt relative to its total capital.

Debt Holders

Individuals or entities that have invested by lending money to another party, expecting repayment plus interest.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, making them partial owners of the company.

Receivables Turnover

A financial metric indicating how often a company collects its average accounts receivable within a certain period, measuring the efficiency of credit sales collection.