Frazier Manufacturing Company Collected the Following Production Data for the Past

question 150

Multiple Choice

Frazier Manufacturing Company collected the following production data for the past month: $\begin{array}{rr}\text { Units Produced }&\text { Total Cost }\\1,600 & \$ 66,000 \\1,300 & 57,000 \\1,500 & 67,500 \\1,100 & 49,500\end{array}$ If the high-low method is used, what is the monthly total cost equation?

• A) Total cost = $13,200 + $33/unit
• B) Total cost = $16,500 + $30/unit
• C) Total cost = $0 + $45/unit
• D) Total cost = $9,900 + $36/unit

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Definitions:

Contingent Payment

A payment that is due only if specific conditions are met, typically used in agreements where future outcomes can influence the amount or timing of the payment.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Probability-Weighted

An approach to forecast future outcomes which involves assigning probabilities to different possible events and calculating expected values.

Time Value

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.