Answer the Following Questions Using the Information Below:
the SouthAus

question 175

Multiple Choice

Answer the following questions using the information below:
The SouthAus Company manufactures several different products.Unit costs associated with Product ADE108 are as follows:
$$\begin{array} { l r } \text { Direct materials } & \$ 40 \\\text { Direct manufacturing labour } & 8 \\\text { Variable manufacturing overhead } & 12 \\\text { Fixed manufacturing overhead } & 23 \\\text { Sales commissions (2\% of sales) } & 6 \\\text { Administrative salaries } & 9 \underline { 9 } \\\quad \text { Total } & \$ 98\end{array}$$
-What are the fixed costs per unit associated with Product ADE108?

• A)$44
• B)$32
• C)$35
• D)$23

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Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all income and expenses except interest and income tax expenses.

Straight-Line Depreciation

A method of allocating the cost of a fixed asset evenly across its useful life.

Net Working Capital

The discrepancy between what a company owns in current assets and owes in current liabilities, showing its financial stability in the short term.

Required Rate

The minimum expected return by investors to make an investment worthwhile, considering the risk involved.