Ships Ahoy Is a Small Company That Makes Model Sailboat

question 92

Multiple Choice

Ships Ahoy is a small company that makes model sailboat kits priced at $120 each.(There is no quantity discount.) The cost of the materials that go into each kit is $45.It costs $5 in labour to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for the monthly salary of its owner.Last month the company sold 150 kits.Ships Ahoy's total revenue for the month was:

• A)$6,750.
• B)$7,500.
• C)$10,500.
• D)$18,000.

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Definitions:

Invested Funds

Capital that has been placed into a project or company, with the expectation of generating income or profit.

Flotation Costs

The administrative cost of issuing new securities. Consists largely of commissions and marketing fees, but printing and engraving costs can also be significant.

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders.

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.