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Arche Produces a Product with the Following Per Unit Costs  Direct materials $17 Direct labour 11 Overhead 12\begin{array}{lr}\text { Direct materials } & \$ 17 \\\text { Direct labour } & 11 \\\text { Overhead } & 12\end{array}

question 64

Essay

Arche produces a product with the following per unit costs.
Last year,Arche produced and sold 3,000 units at a sales price of $80 each.Total selling and administrative expenses were $25,000.
Required: Solve for the following:
 Direct materials $17 Direct labour 11 Overhead 12\begin{array}{lr}\text { Direct materials } & \$ 17 \\\text { Direct labour } & 11 \\\text { Overhead } & 12\end{array} A. total cost of goods sold for last year
B. operating income for last year
C. total gross margin for last year
D. prime cost per unit


Definitions:

Leasing Alternatives

Options available to businesses or individuals for obtaining the use of equipment or property through leasing agreements rather than purchase.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Present Value

The contemporary valuation of foreseeable future earnings or sequences of cash payments, taking into account a specified interest rate.

Net Present Value Method

A method of evaluating the profitability of an investment by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

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