Using the Variable Cost Concept Determine the Mark-Up Per Unit

question 58

Multiple Choice

Using the variable cost concept determine the mark-up per unit for 30,000 units using the following data: Variable cost per unit $15.00, total fixed costs $90,000 and desired profit $150,000.

• A) $10
• B) $15
• C) $8
• D) $23

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Definitions:

Indefinite-Lived Assets

Non-physical assets without a predefined expiry date in terms of economic benefits or usefulness.

Amortization

The systematic reduction of a loan or the spreading out of capital expenses for intangible assets over a specific period of time for accounting and tax purposes.

Fair Value

Fair value is the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Asset Write-Downs

An accounting process involving the reduction in the book value of an asset when its market value falls below its current book value.