Oerther Corporation Reports That at an Activity Level of 5,000

question 111

Multiple Choice

Oerther Corporation reports that at an activity level of 5,000 units, its total variable cost is $131,750 and its total fixed cost is $31,200.What would be the average fixed cost per unit at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.

• A) $6.24
• B) $6.00
• C) $14.94
• D) $32.59

---

Definitions:

Long-Term Trend

A persistent movement in data over a long period, indicating a general direction.

Annual Time Series

Data collected or recorded at yearly intervals, often used for analyzing trends over time.

Data Pattern

The recognizable way that data may be organized or follow a specific arrangement, suggesting trends or relationships.

Cyclical Variation Component

A pattern in time series data that occurs at regular intervals due to cyclic factors, like seasons or economic cycles.