At a Production Level of 5,150 Units,a Project Has Total

question 57

Multiple Choice

At a production level of 5,150 units,a project has total cash costs of $130,789.The variable cost per unit is $11.07,and the depreciation is $8,600.What is the amount of the total fixed costs?

• A)$65,178.50
• B)$78,992.11
• C)$56,204.09
• D)$73,778.50
• E)$68,626.67

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Definitions:

Opportunity Cost

The forfeit of potential benefits from different options when a specific choice is made.

Revenue Forgone

The potential income that is given up when choosing one alternative over another; essentially, it's the opportunity cost of revenue not earned.

Differential Analysis

A decision-making process that looks at the difference in costs and benefits between alternative choices.

Product Cost Distortion

When the allocated costs of manufacturing a product do not accurately reflect the actual costs, leading to incorrect pricing or profitability analysis.