At a Sales Volume of 20,000 Units, Choice Corporation's Sales

question 143

Multiple Choice

At a sales volume of 20,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $132,000.To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 18,500 units? (Assume that this sales volume is within the relevant range.)

• A) $6.60
• B) $6.87
• C) $7.17
• D) $7.14

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Definitions:

Fair Value Hedge

A financial hedge that is used to mitigate the risks associated with the changes in the fair value of assets or liabilities or an identified portion of such assets or liabilities.

Discount Recognized

Discount Recognized refers to the process of acknowledging a reduction from the nominal value of a financial instrument when it is realized or accounted for.

Foreign Exchange Gain

A profit arising from an increase in the value of one currency relative to another in the foreign exchange markets.

Mexican Pesos

The official currency of Mexico, symbolized as MXN, used for all financial transactions within the country.