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The Downstate Block Company Has a Trucking Department That Delivers

question 31

Multiple Choice

The Downstate Block Company has a trucking department that delivers crushed stone from the company's quarry to its two cement block production facilities-the West Plant and the East Plant. Budgeted costs for the trucking department are $700,000 per year in fixed costs and $0.50 per ton variable cost. Last year, 75,000 tons of crushed stone were budgeted to be delivered to the West Plant and 90,000 tons of crushed stone to the East Plant. During the year, the trucking department actually delivered 74,000 tons of crushed stone to the West Plant and 92,000 tons to the East Plant. Its actual costs for the year were $81,000 variable and $708,000 fixed. The level of budgeted fixed costs is determined by peak-period requirements. The West Plant requires 45% of the peak-period capacity and the East Plant requires 55%. The company allocates fixed and variable costs separately.How much fixed trucking department cost should be charged to the West Plant at the end of the year?

Understand the concept of opportunity cost and its application in domestic and international trade.

Understand the relationship between the production of consumer goods and capital goods, and its impact on a nation's future growth rate.

Grasp the concept of marginal benefits and marginal costs, and their roles in determining the optimal output and resource allocation.

Understand the conditions under which an economy can achieve points beyond its production possibilities curve through international trade.

Definitions:

Equity Method

An accounting technique used when a company holds a significant influence over another (associate) company, usually through ownership of 20% to 50% of the voting stock, involving adjusting the value of the investment based on the investee's performance.

Acquisition Differential

The difference between the purchase price of an acquired company and the fair value of its net identifiable assets.

Common Shares

Equity securities that represent ownership in a corporation, entitling holders to a share of the corporation's profits through dividends and/or capital appreciation.

Open Market

A freely competitive market where buyers and sellers can transact without restrictions or regulations.