What Would Be the Average Fixed Inspection Cost Per Unit

question 40

Multiple Choice

What would be the average fixed inspection cost per unit at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range.

• A) $37.58
• B) $4.32
• C) $15.23
• D) $3.78

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Definitions:

Decrease in Cash

A reduction in the amount of cash held by a company, often reflected in its cash flow statement.

P/E Ratio

A valuation metric for a stock, calculated as the current market price per share divided by its earnings per share.

Fixed-Asset Turnover Ratio

A financial ratio that measures how efficiently a company uses its fixed assets to generate sales, calculated by dividing sales by net fixed assets.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a period of time.