Caraco Corporation Has Provided the Following Production and Average Cost

question 38

Multiple Choice

Caraco Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 7,300 units is closest to: (Round your intermediate calculations to 2 decimal places.)

• A) $1,487,375
• B) $1,448,320
• C) $1,500,750
• D) $1,526,430

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Definitions:

Indirect Fixed Cost

Expenses that cannot be directly linked to the production of goods or services and do not vary with the level of production output.

Profit Center

A segment or unit within an organization that is responsible for generating its own revenue and tracking its own costs.

Company Personnel Department

The segment of a business organization that handles hiring, training, employee relations, and benefits administration.

Cost Center

A unit within an organization that does not directly add to profit but still incurs costs, such as a department or project, which needs to be monitored for internal efficiency.