The Following Information Is Available on Bruder Inc

question 89

Multiple Choice

The following information is available on Bruder Inc.'s Product A: The company uses the absorption costing approach to cost-plus pricing described in the text. Based on these data, the total selling and administrative expenses each year are:

• A) $240,000
• B) $300,000
• C) $140,000
• D) $200,000

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Definitions:

Long-run Cost Function

A relationship that shows the lowest possible cost at which a firm can produce any given level of output when all inputs, including capital, are variable.

Cost-output Elasticity

A measure of how responsive the cost of production is to a change in the output level.

Marginal Cost

The added expense incurred upon producing one further unit of a good or service.

Average Cost

The total cost of production divided by the quantity of output produced, indicating the cost per unit of output.