Asked by Clayton Carter on May 20, 2024
Verified
What is the manufacturing profit of Blue Manufacturing on a leased lathe?
A) $7,000
B) $8,500
C) $10,500
D) $17,500
Manufacturing Profit
The profit earned from the manufacturing operations after deducting the costs associated with the production of goods.
Inventory Cost
The total cost incurred to procure, produce, and store unsold goods, including raw materials, labor, and overhead expenses.
Leased Lathe
An asset acquired for use over a predetermined period under a lease agreement, specifically referring to a machine tool used for shaping metal or wood.
- Identify the variances between multiple lease options, including operating, capital/sales-type, and direct-financing leases, and accurately categorize them.
Verified Answer
AA
Ashley AguilarMay 22, 2024
Final Answer :
A
Explanation :
Manufacturing profit = selling price $32,000 - manufacturing cost $25,000 = $7,000
Learning Objectives
- Identify the variances between multiple lease options, including operating, capital/sales-type, and direct-financing leases, and accurately categorize them.