Dreiphosis Corp

question 49

Multiple Choice

Dreiphosis Corp. is in the process of determining whether to purchase a high-capacity machine to make textbooks for the upcoming school year. The high-capacity machine will generate fixed costs of $12,000 per year versus the $3,000 fixed costs of using a low-capacity machine. The variable costs per unit when using the high-capacity machine will be $33. The firm will charge $66 for each textbook and has determined that the high-capacity machine will maximize pretax operating cash flow if sales are greater than 1,000 books. What is the contribution margin under the low-capacity machine scenario?

• A) $41
• B) $24
• C) $32
• D) $46

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Definitions:

Cultural Heritage

The legacy of physical artifacts and intangible attributes of a group or society that are inherited from past generations, maintained in the present, and bestowed for the benefit of future generations.

Satyagraha Movement

A movement based on nonviolent resistance, initiated by Mahatma Gandhi to challenge British rule in India and promote social change.

Nonviolent Resistance

A strategy for social change that employs peaceful methods, as opposed to violence, to bring about political or social change.

Revolutions

Significant changes that drastically alter the social, political, or economic order, often resulting from collective action or conflict.