Joe, Jeff and Jerry Frank Own Frank Brothers Farm, a Seed

question 22

Multiple Choice

Joe, Jeff and Jerry Frank own Frank Brothers Farm, a seed company specializing in seed corn. At their weekly meeting they tried to calculate the portion of the farm's overhead expenses that is fixed and the portion that is variable. Over the past twelve months, the number of bushels of seed corn that has been sold reached its peak in May, when the total monthly overhead costs totaled $255,000 for 100,000 bushels of seed corn sold. The lowest number of bushels sold in the last twelve months occurred in December, when total overhead costs were $75,000 for 4500 bushels sold. What was the variable cost per yard?

• A)$0.53
• B)$1.88
• C)$16.67
• D)$2.55

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Definitions:

Bagel Press

A kitchen tool or appliance designed to shape bagel dough uniformly before it is boiled and baked.

Sold Continuously

Refers to items that are sold without interruption over a period rather than in separate, discrete transactions.

Store

A retail establishment that sells goods or commodities to customers over the counter or through other methods.

Input Prices

The costs associated with the purchase of the materials, labor, and other inputs required for production.