The Total Production Costs at Kellner Machine Works Are $87,000

question 80

Multiple Choice

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

• A) $35,000
• B) $42,000
• C) $45,000
• D) $87,000
• E) $132,000

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Definitions:

Marginal Rate

The additional cost or benefit associated with a one-unit increase in activity, often used in the context of taxation or production.

Substitution

The process of replacing one item with another due to changes in price, preference, or functionality.

Satisfaction

The feeling of pleasure or contentment that comes from fulfilling a desire, expectation, or need, or achieving a goal.

Marginal Rate

The rate at which one additional unit of something affects an outcome, often used in the context of taxes or production.