Porter Corporation Makes and Sells a Single Product Called a Yute

question 74

Multiple Choice

Porter Corporation makes and sells a single product called a Yute. The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year. The following budget data are available: All of these expenses (except depreciation) are paid in cash in the month they are incurred.
If the company has budgeted to sell 12,000 Yutes in December, then the budgeted total cash disbursements for selling and administrative expenses for December would be:

• A) $237,000
• B) $485,400
• C) $248,400
• D) $478,400

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Definitions:

Long-Run Average Cost Curves

A graphical representation showing the average cost per unit of output over a long period, where all inputs, including capital, are variable.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in average costs per unit as output increases.

Diseconomies of Scale

The situation in which a business grows so large that the costs per unit increase, as opposed to economies of scale where costs per unit decrease with the increase in output.

Long-Run Average Cost Curve

A graphical representation that shows the minimum average cost at which any output level can be produced after all inputs are adjustable. It reflects economies and diseconomies of scale.