In 1969, Malcolm Bought a Pontiac Firebird for $2,500

question 343

Multiple Choice

In 1969, Malcolm bought a Pontiac Firebird for $2,500. If the price index was 36.7 in 1969 and the price index was 180 in 2009, then what is the price of the Firebird in 2009 dollars?

• A)$509.72
• B)$6,866.49
• C)$9,761.58
• D)$12,261.58

---

Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance premiums.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, providing a more useful tool for performance evaluation.

Variable Costs

Costs that change in proportion to the level of activity or production volume, such as raw materials and direct labor.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant part of its composition.