Prater Company Has Provided the Following Data -What Is the Best Estimate of the Company's Variable Operating

question 36

Multiple Choice

Prater Company has provided the following data:
$\begin{array}{|l|r|r|}\hline & \text { This Year } & \text { Last Year } \\\hline \text { Units Sold } & 300,000 & 250,000 \\\hline \text { Sales Revenue } & \$ 1,300,000 & \$ 1,050,000 \\\hline \text { Less: Cost of Goods Sold } & \underline{910,000} & \underline{\mathbf{7 3 5 , 0 0 0}} \\\hline \text { Gross Margin } & 390,000 & 315,000 \\\hline \text { Less: Operating Expenses } & \underline{\mathbf{2 7 2 , 0 0 0}} & \underline{\mathbf{2 6 0 , 0 0 0}} \\\hline \text { Operating Income } & \underline{\$ 118,000} & \underline{\$ 55,000} \\\hline\end{array}$


-What is the best estimate of the company's variable operating expense per unit?

• A) $0.24 per unit.
• B) $0.91 per unit.
• C) $0.96 per unit.
• D) $4.17 per unit.

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