A Division of Ditton Industries Manufactures the Futura Model Microwave

question 197

Multiple Choice

A division of Ditton Industries manufactures the Futura model microwave oven. The daily cost (in dollars) of producing these microwave ovens is where x stands for the number of units produced. What is the actual cost incurred in manufacturing the 301^st oven and the marginal cost when ?

• A) The actual cost of the 301^st oven is $18.12, the marginal cost when is $156.00
• B) The actual cost of the 301^st oven is $138.12, the marginal cost when is $138.00
• C) The actual cost of the 301^st oven is $118.12, the marginal cost when is $36.00
• D) The actual cost of the 301^st oven is $138.12, the marginal cost when is $156.00
• E) The actual cost of the 301^st oven is $118.12, the marginal cost when is $120.00

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Definitions:

Gross Margin

Gross margin is a financial metric that measures the difference between revenue and the cost of goods sold (COGS), divided by revenue.

Accounts Receivable Turnover

A ratio that measures how effectively a company collects its receivables, calculated by dividing total net sales by the average accounts receivable.

Inventory Turnover Ratio

A metric indicating how often a company's inventory is sold and replaced over a specific period, useful in evaluating the efficiency of inventory management.

Return on Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.