Sterling Glass Company Uses the High-Low Method to Analyze Mixed

question 6

Multiple Choice

Sterling Glass Company uses the high-low method to analyze mixed costs. The following information relates to the production data for the first six months of the year.What is the estimated total cost at an operating level of 150 hours?

• A) $4,385.00.
• B) $4,785.20.
• C) $4,185.65.
• D) $4,875.00.

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Definitions:

Real Rate of Return

The real rate of return is the annual percentage profit earned on an investment, adjusted for changes in the price level due to inflation or deflation.

Nominal Return

The return on an investment without adjusting for inflation, representing the raw earnings or loss.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Indifference Curve

A graph showing different combinations of two goods that provide equal satisfaction or utility to a consumer.