Lunar Surf Boards Has Annual Fixed Costs of $5,000 with a Variable

question 84

Multiple Choice

Lunar Surf Boards has annual fixed costs of $5,000 with a variable cost of $10 per unit and a sales price of $20 per unit.Lunar expects to sell 1,000 units this year without much trouble.However,Lunar is concerned about the scenario that variable costs will increase 10% this year.If that happens,what will be Lunar's earnings before interest and taxes?

• A) $6,000
• B) $5,000
• C) $4,000
• D) none of the above

Understand the accounting treatment and recognition criteria for goodwill and other intangible assets.

Understand the concepts of capital and revenue expenditures and their impact on financial statements.

Explain the acquisition cost components of property, plant, and equipment.

Identify the proper accounting treatment for the costs associated with fixed assets.

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Definitions:

Lacks Empathy

Describes an individual's difficulty or inability to understand and share the feelings of another person.

Egocentric

The tendency to view everything in relation to oneself and to consider one's own perspectives and interests as being the most important.

Psychotic

Relating to psychosis, a mental state characterized by a disconnection from reality, which may include hallucinations and delusions.

Disordered Thoughts

A condition often reflected as fragmented or disconnected thoughts, typically associated with mental health disorders.