During 20x1, Advanced Systems Introduced Complex Oil Well Monitoring Equipment

question 98

Essay

During 20x1, Advanced Systems introduced complex oil well monitoring equipment and produced 100 units in anticipation of selling to the major oil-producing companies. The first unit produced cost $125,000, and production costs are subject to a 90% learning curve. Note: ln(90%)/ ln(2)= -0.152.
During 20x1, the company sold 20 units and during 20x2, the company sold 40 units. Each unit sells for $100,000. If costs are assigned to cost of goods sold based on the average expected cost for all units in the 2001 production run, what is the company's gross profit during 20x2?

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Definitions:

Sternal Region

The sternal region refers to the area of the body located at the middle of the chest, where the sternum or breastbone is situated.

Breastbone

Also known as the sternum, it is a long flat bone located in the central part of the chest, connecting the rib bones.

Lumbar Region

The lower part of the spine between the diaphragm and the sacrum, consisting of five vertebrae.

Lower Back

The area of the back extending from the bottom of the rib cage to the top of the pelvic region, often a common site for pain or discomfort.