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Earth Company makes 2 products, Wind and Fire. Wind has a Contribution Margin per unit of $6.00 and Fire has a contribution margin per unit of $11.00. Earth Company has annual fixed costs of $290,000 units. Assume that there are only 20,000 machine hours available to make the two products. Each unit of Wind takes 2 machine hours and each unit of Fire takes 4 machine hours. Demand for each product is 4,000 units. How many units of each product should be produced?
Briefly explain the double taxation problem and how paying large salaries to owners avoids it.
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McBride Medical had a cash balance of $7,000 on January 1. The company desires to maintain a cash cushion of $5,000. Funds are assumed to be borrowed, in the increments of McBride pays its vendor on the last day of the month also. The company had ..
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