Information about Kerkonian Corporation is as follows: $\begin{array} { l }&2018&2019\
\text { Output (units) }&14,000&15,000\
\text { Selling price per unit }&\$8&\$8\\
\text { Change in profits }&&\$5,687.50\\\text { Profit-linked measurements: }\
\text { Materials }&&\$50.00\
\text { Labor }&&87.50\
\end{array}$
What is the price-recovery component?
A)$5,825.00
B)$5,687.50
C)$5,550.00
D)$137.50

Question

Information about Kerkonian Corporation is as follows: $\begin{array} { l  }&2018&2019\
\text { Output (units) }&14,000&15,000\
\text { Selling price per unit }&\$8&\$8\\
\text { Change in profits }&&\$5,687.50\\\text { Profit-linked measurements: }\
\text { Materials }&&\$50.00\
\text { Labor }&&87.50\
\end{array}$
 What is the price-recovery component?
A)$5,825.00
B)$5,687.50
C)$5,550.00
D)$137.50

Quizplus · Accepted Answer

The price-recovery component is the change in profits due to the change in selling price. In this case, the selling price per unit remained the same, so the price-recovery component is $0.

Information About Kerkonian Corporation Is as Follows What Is the Price-Recovery Component? A)$5,825

Information About Kerkonian Corporation Is as Follows What Is the Price-Recovery Component?
A)$5,825