The Axle Division of LaBate Company Makes and Sells Only

question 70

Multiple Choice

The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow:
$\begin{array}{|l|r|}\hline \text { Unit Selling Price } & \$ 50 \\\hline \text { Unit Variable Cost } & \$ 30 \\\hline \text { Total Fixed Costs } & \$ 200,000 \\\hline \text { Average Operating Assets } & \$ 750,000 \\\hline \text { Minimum Required Rate of Return } & 12 \% \\\hline\end{array}$
-If Axle sells 15,000 units per year,what would be the residual income?

• A) $10,000.
• B) $30,000.
• C) $50,000.
• D) $100,000.

Identify the correct hypothesis test to use based on the type of data and the research question.

Understand the concept of statistical power and its importance in hypothesis testing.

Understand the concept of P-value in hypothesis testing and its interpretation.

Formulate null and alternative hypotheses for different types of statistical tests.

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Definitions:

Economic Rent

A return on an asset or payment to a factor of production in excess of what's necessary to keep it in its current use.

LAC

Long-run Average Cost, which represents the per unit cost of production when all inputs, including capital, are variable.

Oil Reserves

Quantities of crude oil held underground that have been discovered and are considered recoverable under current economic and operational conditions.

Competitive Equilibrium

A state in a market where the supply of goods matches demand, with no incentive for price change, resulting from the competition among many buyers and sellers.