The Mixed-Up Floor Company Ltd Makes Two Products, Carpet Polish

question 72

Multiple Choice

The Mixed-Up Floor Company Ltd makes two products, carpet polish and floor deodoriser. Operating information from the previous year is:
Fixed costs of $20 000 per year are presently allocated evenly between both products. If the product mix were to change, total fixed costs would remain the same. Calculate the contribution margin per machine hour for floor deodoriser.

• A) $4.00
• B) $2.00
• C) $3.00
• D) $0.25

Discuss examples of menu costs and how they relate to inflation.

Understand the reasons for holding U.S. currency abroad.

Comprehend the functions of money, including as a unit of account, medium of exchange, and store of value.

Recognize the insufficiency of legal tender laws for currency usage and the importance of general acceptance.