Assume that the manufacturing cost of a company is $50,0000 and the general expenses is $50,000.Then, the amount of profit must be equal to at least _____ for the cost-based definition criterion of foreign market value to be met.

Question

Quizplus · Accepted Answer

The cost-based definition criterion of foreign market value is met when the profit is at least 8% of the sum of manufacturing cost and general expenses. Here, the total cost is $50,000 (manufacturing) + $50,000 (general expenses) = $100,000. 8% of $100,000 is $8,000. Therefore, the profit must be at least $8,000 to meet the criterion. However, none of the given options exactly match this calculation, suggesting a possible typo in the question or options. Among the provided options, $44,000 (A) is the only one that exceeds the minimum required profit of $8,000, indicating a misunderstanding in the question's formulation or a typographical error in the manufacturing cost (possibly meant to be $500,000, which would change the calculation).

Assume That the Manufacturing Cost of a Company Is $50,0000