Information about Roosevelt Corporation is as follows: $\begin{array} { l }&2018&2019\
\text { Output (units) }&10,000&12,000\
\text { Selling price per unit }&\$25&\$25\\
\text { Change in profits }&&\$96,025\\\text { Profit-linked measurements: }\
\text { Materials }&&\$1,100\
\text { Labor }&&825\
\end{array}$
What is the price-recovery component?
A)$1,925
B)($96,025)
C)$96,025
D)$94,100

Question

Information about Roosevelt Corporation is as follows: $\begin{array} { l  }&2018&2019\
\text { Output (units) }&10,000&12,000\
\text { Selling price per unit }&\$25&\$25\\
\text { Change in profits }&&\$96,025\\\text { Profit-linked measurements: }\
\text { Materials }&&\$1,100\
\text { Labor }&&825\
\end{array}$
 What is the price-recovery component?
A)$1,925
B)($96,025)
C)$96,025
D)$94,100

Quizplus · Accepted Answer

The price-recovery component reflects the portion of the change in profits attributable to changes in selling prices. Since the selling price per unit remained constant at $25 between 2018 and 2019, the entire change in profits of $96,025 is due to factors other than price changes, such as changes in costs or output volume. Therefore, the price-recovery component is $0, not directly listed among the options. However, the closest related concept given the provided information is the change in profits, which is not directly affected by price changes in this scenario. The options provided do not accurately represent the concept of a price-recovery component under these circumstances.

Information About Roosevelt Corporation Is as Follows What Is the Price-Recovery Component? A)$1,925 B)($96,025) C)$96,025 D)$94,100

Information About Roosevelt Corporation Is as Follows What Is the Price-Recovery Component?
A)$1,925
B)($96,025)
C)$96,025
D)$94,100