Terry’s Frame & Art Shoppe produces and sells picture frames to clients at $8.00 per picture frame. The variable cost to produce each picture frame is $3.25. The fixed costs are $3,000 per month. What is the firm’s contribution margin per picture frame?

Sauer food company has decided to buy a new computer system with an expected life of three years. the cost is $440,000. the company can borrow $440,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. assume interest is paid in full at the end of each year. a. how much would sauer food company save in interest over the three-year life of the computer system if the one-year loan is utilized and the loan is rolled over (reborrowed) each year at the same 12 percent rate? compare this to the 14 percent three-year loan.