Carol's Dolls Has Fixed Operating Costs of $25,000

question 14

Multiple Choice

Carol's Dolls has fixed operating costs of $25,000. Its sale price is $55 per doll, and its variable operating cost is $30 per doll. It sells 3,000 dolls per month. The firm's earnings before interest and taxes is ________.

• A) $37,500
• B) $55,000
• C) $75,000
• D) $50,000

Understand the concept of archival research and how it is conducted.

Recognize the importance of reliability and validity in observational studies.

Understand the methodological issues related to observational studies such as reactivity and observer bias.

Comprehend the role of case studies in psychological research and their potential applications.

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Definitions:

Book Value

A financial metric that calculates the net asset value of a company's assets minus its liabilities, representing the shareholders' equity value in accounting terms.

Depreciation Expense

The portion of a fixed asset's cost allocated to expense across its useful life, reflecting the asset's consumption or decline in value.

Straight-Line

An approach where the expense of an asset is uniformly allocated across its lifespan to calculate depreciation.

Double-Declining-Balance

A depreciation technique that increases the standard rate of depreciation twofold, thus diminishing an asset's value at a faster pace.