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Answer the Following Questions Using the Information Below

question 45

Multiple Choice

Answer the following questions using the information below:
Cairns Company has invested $2 000 000 in a plant to make spear guns for fishing.The target operating profit desired from the plant is $300 000 annually.The company plans annual sales of 1500 spear guns at a selling price of $2000 each.
-What is the cost base of each spear gun for Cairns Company?


Definitions:

Management Rights Clause

A provision in a labor contract that specifies the rights and responsibilities of management, including decision-making on business operations.

Unilateral Control

A management style where decisions are made by one party (usually the employer or management) without consultation or agreement with others, particularly employees or unions.

Decision-making Authority

The power or right to make decisions within an organization, group, or system.

Free Rider

An individual who benefits from the goods, services, or advantages provided by a group without contributing to the cost or effort involved.

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