Use the Information Below to Answer the Following Questions $\text { Production for April is } 10,000 \text { racquets }$

question 54

Multiple Choice

Use the information below to answer the following questions.
Whack Ltd, a tennis racquet manufacturer, has broken the production process into three lines, each in a different department: framing, stringing, and finishing. The following information relates to each department for the month of April: $\begin{array}{llll} & \text { FRAMING } & \text { STRINGING } & \text { FINISHING } \\\text { Direct Costs } & \$ 20,000 & \$ 30,000 & \$ 66,000 \\\text { Ind irect Costs } & \$ 10,000 & \$ 20,000 & \$ 30,000 \\\text { Labour Hours } & 2,000 \mathrm{hrs} & 5,000 \mathrm{hrs} & 3,000 \mathrm{hrs}\\\text { Machine hours } & 500 \mathrm{hr} s\end{array}$
$\text { Production for April is } 10,000 \text { racquets }$
-Refer to the table above. The overhead recovery rate for framing based on machine hours is:

• A)$4.
• B)$5.
• C)$2.
• D)$20.

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Definitions:

Price Elasticity

Price elasticity measures how the quantity demanded or supplied of a good changes in response to a change in its price.

Linear Demand

A type of demand relationship where changes in price lead to direct, proportional changes in quantity demanded.

Price Elastic

An assessment of the influence that price changes have on the consumer's purchasing volume of a good.

Inversely Related

A relationship between two variables where one increases as the other decreases.