Tara Purchased a Machine for $40,000 to Be Used in Her

question 31

Multiple Choice

Tara purchased a machine for $40,000 to be used in her business. The cost recovery allowed and allowable for the three years the machine was used are computed as follows.
If Tara sells the machine after three years for $15,000, how much gain should she recognize?

• A) $3,480
• B) $6,360
• C) $9,240
• D) $11,480
• E) None of the above

Compute and interpret the overall contribution margin ratio for a company with multiple products.

Analyze the effects of changes in fixed costs and sales volume on the break-even point.

Determine the contribution margin ratio and its impact on profitability.

Understand the impact of changes in variable and fixed costs on net income.

---

Definitions:

Perpetual Budget

A continuously updated budget that adjusts and rolls over to subsequent periods as the financial year progresses.

Rolls Forward

A term used in accounting to describe the process of moving figures from one period to the next, often related to budgets or forecasts.

Budgets

Financial plans that outline expected revenues and expenditures for a specific period, guiding spending and investment decisions.

Bottlenecks

Restrictions in a production process that limit throughput, often leading to delays and reduced production efficiency.