Given the Cost Information in the Table,what Is the Cheapest

question 70

Multiple Choice

Given the cost information in the table,what is the cheapest activity to crash on a per week basis? $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & \text { Normal Time } & \text { Narmal Cost } & \text { Crash Time } & \text { Crash Cost } \\\hline \mathrm { A } & 8 & \$ 1,000 & 5 & \$ 6,000 \\\hline \mathrm { B }& 6 & 2,000 & 4 & 6,000 \\\hline \mathrm { C } & 9 & 2,500 & 6 & 8,000 \\\hline \mathrm { D } & 12 & 4,000 & 8 & 10,000 \\\hline\end{array}$$

• A)Activity A
• B)Activity B
• C)Activity C
• D)Activity D

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; this contribution covers fixed expenses and generates profit.

Absorption Costing

An accounting method that includes all direct costs and allocated overheads in the cost of a product or service, as opposed to variable costing which excludes certain overheads.

Ending Inventory

The total value of goods available for sale at the end of an accounting period or fiscal year.