Rhome Corporation's Relevant Range of Activity Is 2,000 Units to 6,000

question 93

Multiple Choice

Rhome Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: If 5,000 units are produced, the total amount of manufacturing overhead cost is closest to:

• A) $20,500
• B) $23,000
• C) $18,000
• D) $19,250

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Definitions:

SUTA

This stands for State Unemployment Tax Act, which is a payroll tax that employers must pay to the state to fund its unemployment benefits program.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Quick Ratio

A liquidity metric that indicates a company's ability to cover its current liabilities without selling inventory, calculated as (cash plus marketable securities plus accounts receivable) divided by current liabilities.

Temporary Investments

Short-term investments that a company plans to convert into cash within a short period, typically one year or less.