The Plastechnics Company Began Operations Several Years Ago

question 127

Essay

The Plastechnics Company began operations several years ago. The company's product requires materials that cost $25 per unit. The company employs a production supervisor whose salary is $2,000 per month. Production line workers are paid $15 per hour to manufacture and assemble the product. The company rents the equipment needed to produce the product at a rental cost of $1,500 per month. The building is depreciated on the straight-line basis at $9,000 per year.
The company spends $40,000 per year to market the product. Shipping costs for each unit are $20 per unit.
The company plans to liquidate several investments in order to expand production. These investments currently earn a return of $8,000 per year.
Required:
Complete the answer sheet below by placing an "X" under each heading that identifies the cost involved. The "Xs" can be placed under more than one heading for a single cost, e.g., a cost might be a sunk cost, an overhead cost, and a product cost.

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Definitions:

Retirement Benefits

Financial support or services provided to individuals upon retirement, including pensions, social security, and health care benefits, aimed at ensuring financial security in old age.

Income Redistribution

The reallocation of wealth and income in a society, typically through taxation and government spending, aimed at reducing economic inequalities.

Lifetime Contribution

Recognition of an individual's enduring positive impact on a field or society over the span of their career.

Affordable Care Act

A comprehensive healthcare reform law enacted in 2010 aimed at increasing health insurance coverage and reducing healthcare costs.