Larsen Corporation Has Designed a New Product, J57, Whose Variable

question 68

Multiple Choice

Larsen Corporation has designed a new product, J57, whose variable cost is $61.80 per unit and that requires 3.30 minutes of the constrained resource. The opportunity cost is $31.00 per minute used of the constrained resource. What is the minimum acceptable selling price for the new product?

• A) $92.80
• B) $61.80
• C) $102.30
• D) $164.10

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Definitions:

Multiple-Step Income Statement

A multiple-step income statement is a detailed financial statement that separates operating revenues and expenses from non-operating ones, providing a thorough insight into a company's financial activities.

Accounting Records

Documented evidence of a business's financial transactions, used for tracking and reporting purposes.

Current Year

The ongoing calendar year or fiscal year in which a business is operating.

FOB Shipping Point

A term used in shipping contracts indicating that the buyer is responsible for the goods and the shipping cost from the moment they leave the seller's premises.