Batterson Corporation Leases Its Corporate Headquarters Building

question 168

Multiple Choice

Batterson Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the company's sales volume. In a recent month in which the sales volume was 28,000 units, the lease cost was $697,200.
-To the nearest whole cent,what should be the average lease cost per unit at a sales volume of 26,400 units in a month? (Assume that this sales volume is within the relevant range.)

• A) $25.66
• B) $24.90
• C) $23.88
• D) $26.41

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Definitions:

Net Assets

The total assets of an entity minus its total liabilities, indicating the entity's net worth or equity value.

Consolidated Financial Statements

Financial statements that present the financial position and results of operations of a parent company and its subsidiaries as one single entity.

Parent Company

A parent company is a corporation that owns enough voting stock in another corporation (subsidiary) to control its board of directors and therefore its operations and policies.

Subsidiary

A company that is completely or partially owned and wholly controlled by another company, referred to as the parent company.