A Firm Is Reviewing a Project with a Labor Cost

question 18

Multiple Choice

A firm is reviewing a project with a labor cost of $18.90 per unit,raw materials cost of $21.63 a unit,and fixed costs of $8,000 a month.Sales are projected at 7,200 units total for the 3-year life of the project.What are the total variable costs per year?

• A)$106,300
• B)$99,300
• C)$97,272
• D)$103,300
• E)$109,300

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Definitions:

Sole Shareholder

An individual who owns 100% of the shares of a corporation, making them the exclusive owner.

Stock Exchange

A marketplace where securities, such as stocks and bonds, are bought and sold.

Liability

The state of being legally responsible for something, especially in terms of owing money or other obligations.

Incorporators

Incorporators are individuals or entities that are involved in creating and registering a corporation with the relevant state authority, completing and filing its articles of incorporation.