In: Accounting
QUESTION TWO
New England Fastener Ltd makes a patented marine bulkhead latch that wholesales for $6.00. Each latch has variable operating costs of $3.50. Fixed operating costs are $50 000 per year. The firm pays $13 000 interest and preference dividends of $7000 per year. At this point, the firm is selling 30 000 latches a year and is taxed at 30%.