A Proposed Project Has a Contribution Margin Per Unit of $13.10,fixed

question 6

Multiple Choice

A proposed project has a contribution margin per unit of $13.10,fixed costs of $74,000,depreciation of $12,500,variable costs per unit of $22,and a financial break-even point of 11,360 units.What is the operating cash flow at this level of output?

• A)$0
• B)$12,500
• C)$62,309
• D)$74,816
• E)$86,500

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Definitions:

Perfect Mobility

A theoretical condition where factors of production, such as labor and capital, can be freely moved from one use to another without costs or barriers.

Marginal Revenue

The revenue increment achieved by selling an extra unit of a product or service.

Marginal Cost

The expense associated with manufacturing an additional unit of a product or service.

Average Total Cost

The sum of all production expenses (both constant and fluctuating) divided by the overall output quantity.