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:

Resource Allocation

The process of distributing available resources among various projects, tasks, or investments.

Relationship Conflict

Disagreements and personal incompatibilities among group members that stem from interpersonal issues, often leading to tension and reduced group cohesion.

Process Conflict

A type of conflict that arises from disagreements over the logistics, delegation, and methods of task achievement within a team or organization.

Member Satisfaction

The degree to which the needs, expectations, or goals of members or participants in a group, organization, or program are met or fulfilled.