WDY Currently Sells Its Primary Product for $85 Per Unit

question 89

Multiple Choice

WDY currently sells its primary product for $85 per unit, with a profit margin of 30%. Cost of goods sold totals 40% of the product's total cost. WDY's managers are considering implementing a kaizen costing system. If WDY is successful in achieving its kaizen goal, the reduced nonmanufacturing cost (i.e., the cost excluding the product cost) per unit will be

• A) $47.60
• B) $28.56
• C) $19.04
• D) $20.40

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Definitions:

Detritivore

Animal that feeds on small bits of organic material.

Trophic Category

A classification describing the feeding position and role of an organism in an ecosystem's food chain or web.

Primary Consumer

Organisms that feed on primary producers or autotrophic plants, forming the second trophic level in the food chain.

Herbivore

An animal that primarily eats plants or plant-based materials.