Axelrod Company Has Fixed Costs of $250,000

question 70

Multiple Choice

Axelrod Company has fixed costs of $250,000. Highest production volume this year was in January when there were 100,000 units produced and total costs of $550,000. How much is the variable cost per unit? (Please round all amounts to the nearest cent.)

• A) $3.00
• B) $5.50
• C) $2.50
• D) $3.50

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Definitions:

Special Causes

Unusual or non-random factors that cause variation in a process, distinguished from common causes that are inherent to the process.

Quantitative Sample Statistic

A numerical measurement that describes an attribute of a sample of a population.

Statistical Quality Control

A method of using statistical methods to monitor and control a process to ensure that it operates at its full potential to produce conforming product.

Control Limits

The boundaries in control charts that distinguish between normal and abnormal variations of the process being monitored.