A Lab at the DeBakey Institute Orders 150 Rats a Week

question 163

Multiple Choice

A lab at the DeBakey Institute orders 150 rats a week for each of the 52 weeks in the year for experiments that the lab conducts.Suppose the mean cost of rats used in lab experiments turned out to be $20.00 per week.Interpret this value.

• A)Most of the weeks resulted in rat costs of $20.00
• B)The median cost for the distribution of rat costs is $20.00
• C)The expected or average costs for all weekly rat purchases is $20.00
• D)The rat cost that occurs more often than any other is $20.00

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and loan payments.

Flexible Budget

A flexible budget adjusts to changes in actual revenue or other activity levels, allowing for more accurate budget comparisons.

Machine Hours

A measure of production or work volume through the number of hours a machine is operated.

Variable Manufacturing Overhead

The costs of indirect manufacturing that vary with the level of production, such as utilities or materials used in production that are not directly traceable.