The Total Traceable Costs of the Account Billing Activity Centre

question 64

Multiple Choice

The total traceable costs of the account billing activity centre is $245,000. Cost behaviour analysis indicates that fixed costs are $75,000. Activity analysis indicates that the cost driver for account billing activity is the number of lines printed, and the total lines printed is 2,500,000.
-What is the cost function?

• A) Costs = $ 75,000 + $0.098(Lines)
• B) Costs = $ 75,000 + $0.068(Lines)
• C) Costs = $245,000 + $0.068(Lines)
• D) Cannot be determined

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Definitions:

Translation Losses

Financial losses resulting from converting the financial statements of a foreign subsidiary into the parent company's currency.

Foreign Governments

The governing bodies of nations other than one's own, which may interact through diplomacy, trade, and other forms of engagement.

Political Risk

Political risk involves the possibility that political decisions, events, or conditions will significantly affect the profitability of a business or the expected value of a given economic action.

Cross-Rate

Refers to the exchange rate between two currencies calculated through their common exchange rates with a third currency.