SeptSeven Has Found That It Is Indifferent Between Purchasing a High-Capacity

question 50

Multiple Choice

SeptSeven has found that it is indifferent between purchasing a high-capacity vacuum component assembly machine or a lower capacity machine as long as sales are 1,900 units per month. The price of each calculator is $70. The high-capacity machine has cash expenses of $100,000 per month and depreciation and amortization expenses of $30,000 per month, while the alternative has cash expenses of $30,000 per month and depreciation and amortization expenses of $5,000 per month. Under the low-capacity alternative, variable costs per unit are $60. If the firm bases its decisions on the accounting operating profit break-even, then what is the variable cost per unit under the high-capacity alternative?

• A) $10
• B) $47
• C) $60
• D) $70

---

Definitions:

Strike

The direction of a horizontal line on an inclined surface.

Dip

The angle that a layer or structural surface makes with the horizontal, measured perpendicular to the strike.

Fault

A crack in the Earth's crust resulting from the movement of rock on either side of the crack, which can lead to earthquakes.

Tectonics

The study of the Earth's crust and mantle involving the processes that structure the Earth's surface, including the formation of mountains, continents, and oceans.