Zeman Company Has No Beginning and Ending Inventories,and Reports the Following

question 69

Multiple Choice

Zeman Company has no beginning and ending inventories,and reports the following data about its only product:
$\begin{array}{ll}\text { Direct materials used } & \$ 200,000 \\\text { Direct labor } & \$ 180,000 \\\text { Fixed indirect manufacturing } & \$ 100,000 \\\text { Fixed selling and administrative } & \$ 150,000 \\\text { Variable indirect manufacturing } & \$ 120,000 \\\text { Variable selling and administrative } & \$ 60,000 \\\text { Selling price(per unit) } & \$ 75\end{array}$
$\begin{array} { l } \text {Units produced and sold }&10,000 \\\end{array}$

Zeman Company uses the contribution approach to prepare the income statement.What is the contribution margin?

• A) $150,000
• B) $190,000
• C) $250,000
• D) $370,000

Calculate profit-maximizing output levels for firms in various market scenarios.

Understand how labor supply curves can influence wage rates and labor costs.

Recognize the role of marginal costs in decision-making processes for monopolistic firms.

Apply mathematical models to derive optimal business strategies in monopoly conditions.

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Definitions:

Decline

A decrease in quantity, quality, or strength over a period, often observed in economic indicators, stock prices, or physical capacities.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Payment Stream

Payment stream refers to a series of payments made over time, such as in an annuity, loan repayments, or any regular monetary transfers.