Determine the Fixed Cost Given the Following Information: Highest Level

question 18

Multiple Choice

Determine the fixed cost given the following information: Highest level of activity - 880 units at a total cost of $4,800
Lowest level of activity - 240 units at a total cost of $1,600

• A)$229
• B)$400
• C)$2,600
• D)$3,200

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Definitions:

Gross Profit

The financial metric calculated as sales revenue minus the cost of goods sold, indicating the efficiency of a company in producing and selling its goods.

Sales Discounts

Reductions in the sales price offered by a seller to a buyer, often to prompt early payment or bulk purchases.

Accounts Receivable Turnover Ratio

A financial metric indicating how efficiently a company collects cash from its credit customers by measuring how often receivables are collected during a period.