Nappon Co Has Two Products Named X and Y $\text { The following actual operating results were reported after the year was over: }$

question 66

Multiple Choice

Nappon Co. has two products named X and Y. The firm had the following master budget for the year just completed: $\begin{array}{lrrr} & \text { Product X } & \text { Product Y } & \text { Total } \\\text { Sales } & \$ 260,000 & \$ 360,000 & \$ 620,000 \\\text { Variable Costs } & 156.000 & 180,000 & 336,000\\\text { Contribution Margin } & \$ 104,000 & \$ 180,000 & \$ 284,000 \\\text { Fixed costs } & 130,000 & 108,000 & 238,000\\\text { Operating Income (Loss) }&\$(26,000) &\$72,000&\$46,000\\\text { Selling Price per unit }&\$130.00&\$60.00\end{array}$

$\text { The following actual operating results were reported after the year was over: }$

$\begin{array}{lrrr} & \text { Product X } & \text { Product Y } & \text { Total } \\\text { Sales } & \$ 202,500 & \$ 467,500 & \$ 670,000 \\\text { Variable Costs } & 117.000 & 212,500 & 329,500\\\text { Contribution Margin } & \$ 85,500 & \$ 255,000 & \$ 340,500 \\\text { Fixed costs } & 140,000 & 108,000 & 248,000\\\text { Operating Income (Loss) } & \$(54,500) & \$ 147,000 & \$ 92,500\\\text { Units Sold } & 1,500 & 8,500\end{array}$ The sales quantity variance for Product X is:

• A) $4,000 favorable.
• B) $25,000 favorable.
• C) $26,000 favorable.
• D) $45,000 favorable.
• E) $52,000 unfavorable.

Appreciate the economic rationale behind the cost structures of firms and the implications for resource allocation.

Understand the concepts of explicit and implicit costs and their role in production.

Differentiate between economic profit and accounting profit, including the inclusion of opportunity costs.

Recognize the opportunity cost of capital as a key concept in investment decisions for maintaining a firm's capital assets.

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Definitions:

Courtesy

The showing of politeness in one's attitude and behavior toward others; a polite gesture or remark.

Authoritarianism

A governing system centered on concentrated power and authority, often lacking democratic participation or personal freedoms.

Prejudice

Preconceived opinion or judgment about someone or something that is not based on reason or actual experience.

Sociocultural Factors

Elements that impact an individual's life and behavior, which emerge from the societal and cultural context they live in.