Given the Cost Formula Y = $17,500 + $4X, at What

question 41

Multiple Choice

Given the cost formula Y = $17,500 + $4X, at what level of activity will total cost be $42,500?

• A)10,625 units.
• B)6,250 units.
• C)4,375 units.
• D)5,250 units.

---

Definitions:

Direct Materials

Raw materials that are directly attributable and allocable to a finished product in the manufacturing process.

Direct Labor-Hours

The total hours worked directly on the manufacturing of goods.

Variable Overhead

Costs that fluctuate with changes in production volume, such as utilities and materials, affecting the cost to produce goods or services.

Direct Materials

The raw materials that are directly traceable to the production of a specific product and constitute a significant portion of the product's direct costs.