Anthony Company Has Fixed Costs of $30,000 Per Month

question 148

Multiple Choice

Anthony Company has fixed costs of $30,000 per month. Highest production volume during the year was in January when 100,000 units were produced, 75,000 units were sold, and total costs of $630,000 were incurred. In June, the company produced only 55,000 units. What was the total cost incurred in June?

• A)$480,000
• B)$360,000
• C)$630,000
• D)$830,000

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Definitions:

Bank Credits

The aggregate amount of credit available to a borrower from the banking system.

Net Present Value

A method of evaluating the profitability of an investment by calculating the difference between the present value of cash inflows and the present value of cash outflows over the investment's lifetime.

Variable Cost

Costs that vary in proportion to the volume of output or activity, such as materials and labor.

Monthly Interest Rate

The percentage of interest charged or earned on a loan or investment over a month.