Sutton Company Produces Flash Drives for Computers, Which It Sells

question 32

Multiple Choice

Sutton Company produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During April, 700 drives were sold.Fixed costs for April were $4 per unit for a total of $2,800 for the month.How much does Sutton's operating income increase for each $1,000 increase in revenue per month?

• A)$700
• B)$500
• C)$14,000
• D)Not enough information to determine the answer.

---

Definitions:

Bayes' Law

A theorem in probability theory used to update the probability of a hypothesis as more evidence or information becomes available.

Posterior Probability

The probability of an event or hypothesis after taking into consideration new evidence or information.

Prior Probabilities

The probabilities that are assigned to events or hypotheses before any relevant evidence is taken into account, used in Bayesian analysis.

Likelihood Probabilities

Measures of how probable different outcomes are, given a specific set of observed data, in statistical analysis.