If the Cost of Plaster and Labor Were $13 Per

question 32

Multiple Choice

if the cost of plaster and labor were $13 per gnome and everything else is as in the problem (gnome molds cost $1,000, interest rate is 10%) , what is the lowest price of gnomes at which there would be a positive supply in the long run?

• A)$14.30
• B)$26
• C)$15.20
• D)$13
• E)$15.60

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating the efficiency of a company in using its labor and supplies.

Net Sales

Revenue from sales transactions after deducting returns, allowances for damaged or missing goods, and any discounts offered.

Income Summary

An account used in the closing process that summarizes the revenues and expenses for a specific accounting period.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues and expenses to show net profit or loss.