Fasheh Corporation's Relevant Range of Activity Is 7,000 Units to 11,000

question 114

Multiple Choice

Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows:

-If 10,000 units are produced,the total amount of fixed manufacturing cost incurred is closest to:

• A) $128,250
• B) $121,500
• C) $148,500
• D) $135,000

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Definitions:

Horizontal Analysis

A financial analysis technique that compares line items in financial statements over a number of accounting periods.

Net Sales

The amount of sales revenue remaining after deducting returns, allowances for damaged or missing goods, and discounts.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.