Staley Co Manufactures Computer Monitors

question 70

Multiple Choice

Staley Co. manufactures computer monitors. The following is a summary of its basic cost and revenue data:Assume that Staley Co. is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.

If an $18,000 increase in the advertising budget would increase monthly sales by $60,000, the new level of operating income (πB) for Staley Co. would be:

• A) $19,800.
• B) $21,800.
• C) $24,800.
• D) $23,800.
• E) $20,800.

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Definitions:

Book Value

The book value represents the value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus any depreciation.

Additions

Increases or improvements to an asset that extend its useful life or enhance its productivity.

Plant Asset

Assets that are tangible, long-lived, and used in the production or sale of goods and services, such as buildings and machinery.

Computer Specifications

Detailed information about the hardware and software components of a computer system, including processor speed, memory size, and storage capacity.