Answer the Following Questions Using the Information Below

question 134

Multiple Choice

Answer the following questions using the information below:
Thornton Company has invested $2,000,000 in a plant to make commercial juicer machines. The target operating income desired from the plant is $360,000 annually. The company plans annual sales of 7,000 juicer machines at a selling price of $400 each.
-What is the cost base of each juicer machine for Thornton Company?

• A)$349
• B)$324
• C)$338
• D)$304

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Definitions:

Shareholder

A person or entity that owns part of a company through the possession of one or more shares of its stock.

Director

A person elected by the shareholders to direct corporate affairs.

Corporate Affairs

Activities and responsibilities related to the operation and management of a corporation, including compliance, governance, and public relations.

Limited Partner

One who invests in a limited partnership but does not play an active role in managing the business. Unlike general partners, limited partners are only liable for partnership debts up to the amounts they have invested.