The Current Cost Structure for the Production Department of Performance

question 77

Multiple Choice

The current cost structure for the production department of Performance, Inc., has fixed expenses of $500,000 and variable expenses of $200 per unit.Unit sales volume is 6,000 units.Performance, Inc., can reduce variable expenses to $100 per unit with automated manufacturing technology.What is the new fixed expense amount after automation that will produce the same current operating income on sales volume of 6,000 units?

• A)$500,000.
• B)$1,100,000.
• C)$1,200,000.
• D)$1,700,000.

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Definitions:

Hazardous Occupations

Jobs or professions that involve a high risk of physical injury or health hazards to the employees performing them.

Worker Retention

The ability of an organization to retain its employees and reduce turnover by creating a positive work environment and offering competitive benefits.

Management Climate

The overall tone, environment, and culture within an organization as shaped by management's leadership and policies.

Supervisor Relationship

The dynamic and interaction between a supervisor and their subordinates, impacting work environment and productivity.