A Developer of a New Subdivision Wants to Build Homes

question 75

Multiple Choice

A developer of a new subdivision wants to build homes that are all different. There are three different interior plans that can be combined with any of five different home exteriors. How many different homes can be built?

• A)8
• B)10
• C)15
• D)30

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Definitions:

Unit Variable Expenses

Costs that vary directly with the production volume, calculated on a per-unit basis.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, or utilities.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.

Margin Of Safety

The extent to which sales can decline before a business reaches its breakeven point.