Ponszko Nursery Used High-Low Data from June and July to Determine

question 8

Multiple Choice

Ponszko Nursery used high-low data from June and July to determine its variable cost of $12 per unit. Additional information follows: $$\begin{array} { l c c } \text { Month } & \text { Units produced } & \text { Total costs } \\\text { June } & 2,000 & \$ 32,000 \\\text { July } & 1,000 & 20,000\end{array}$$ If Ponszko's produces 2300 units in August how much is its total cost expected to be?

• A) $8000
• B) $39600
• C) $27600
• D) $35600

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Definitions:

Underapplied Amount

The shortfall when the allocated budgeted or standard cost amount is less than the actual expense.

Raw Materials

The basic, unprocessed inputs required for the production process, such as metals, wood, and agricultural products.

Units Requisitioned

Describes the quantity of inventory items requested or ordered for production or usage in a business operation.

Production

The process of creating, manufacturing, or enhancing goods and services through the combination of labor, materials, and machinery.