Putnam Distributors Is Contemplating Whether or Not to Accept a Special

question 42

Multiple Choice

Putnam Distributors is contemplating whether or not to accept a special order.Putnam wishes to have after-tax cash receipts of $5200 if they accept the order.If Putnam has a tax rate of 35 per cent,what is the price the customer should be charged for their order?

• A) $14 857
• B) $ 3380
• C) $ 8000
• D) $ 7020

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies with the level of production.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.

Short-run Supply

The amount of output that producers are willing and able to sell at different prices over a short period of time, often assuming some inputs are fixed.

State License Fee

A fee required by certain state governments for the granting of a license to operate a particular business or profession within that state.