Wood carving corporation manufactures three products. because of a recent lack of skillled wood carvers, the corporation has had a shortage of available labor hours. the following per unit data relates to the three products of the corporation:

letter openers elvis statues candle holders
sales price $30 $80 $42
variable costs $20 $40 $20
labor hours required 1 6 2
assume that wood carving has 1,800 labor hours available next month. also assume that wood carving can only sell 800 units of each product in a given month. what is the maximum amount of contribution margin that wood carving can generate next month given this labor hour shortage?

a. $12,000

b. $19,000

c. $19,600 (correct answer)

d. $19,800

e. none of the above

Franklin painting company is considering whether to purchase a new spray paint machine that costs $4,800. the machine is expected to save labor, increasing net income by $720 per year. the effective life of the machine is 15 years according to the manufacturer’s estimate. required determine the unadjusted rate of return based on the average cost of the investment.

Gyou plan to deposit $1,700 per year for 5 years into a money market account with an annual return of 2%. you plan to make your first deposit one year from today. what amount will be in your account at the end of 5 years? round your answer to the nearest cent. do not round intermediate calculations. $ assume that your deposits will begin today. what amount will be in your account after 5 years? round your answer to the nearest cent. do not round intermediate calculations.

You are chairman of the board of a successful technology firm. there is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%. your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. one member of the board feels that it is un-american to use various accounting strategies in order to avoid paying taxes. others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. one board member quoted what the ceo of exxon once said: “i’m not a u. s. company and i don’t make decisions based on what’s good for the u. s.” what are the alternatives? what are your recommendations? why do you recommend this course of action?