The International Company Makes and Sells Only One Product

question 8

Multiple Choice

The International Company makes and sells only one product. There are 2 divisions, one in France and one in Newcastle.
The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
French Division Cost Structure


Newcastle Division Cost Structure

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All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the French Division budgeted to sell 25,000 units in July, then the total budgeted selling and administrative expenses per unit sold for July is

• A)£2.65
• B)£3.28
• C)£5.93
• D)£5.45

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Definitions:

Supply Curves

A graphical representation showing the relationship between the price of a good or service and the quantity of it that suppliers are willing to offer at that price.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), reflecting the true value of goods and services produced.

Supply Curves

A graphical representation that shows the relationship between the price of a good or service and the quantity that suppliers are willing to offer for sale at that price, over a given period.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace where individuals pursuing their own self-interest lead to the benefit of society at large.