Scenario 13-5 A Certain Firm Produces and Sells Staplers. Last Year, It

question 292

Multiple Choice

Scenario 13-5
A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 13-5.In producing the 7,000 staplers,the firm's average fixed cost was

• A)$1.00
• B)$1.32
• C)$2.21
• D)$2.43

Determine total supply chain expected profit from given data.

Examine the effects of vertical integration versus independent operation within supply chains.

Understand the importance and implications of transportation decisions within a supply chain.

Recognize the concept and operational benefits of a milk run in logistics.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Net Operating Income

The income generated from normal business operations after subtracting operating expenses from gross profit.

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, ensuring stability in budget planning.

Cost-Plus Approach

A pricing strategy where a fixed percentage or fixed amount is added to the total cost of producing a product or delivering a service to determine its selling price.