Outdoor Creations Sells Its Patio Heaters for $300 Each

question 247

Multiple Choice

Outdoor Creations sells its patio heaters for $300 each. Its variable cost is $220 per heater. Fixed costs are $40,000 per month for volumes up to 1,000 heaters. Above 1,000 heaters, monthly fixed costs are $62,000.
-Rockwell Corporation manufactures and sells computer keyboards. The keyboard sells for $55 per unit and its variable costs per unit are $42. Fixed costs are $80,000 per month for sales volumes up to 40,000 keyboards. If more than 40,000 keyboards are sold, the fixed costs will be $110,000. The flexible budget would reflect what monthly operating income for a sales volume of 52,000 keyboards?

• A) $566,000
• B) $676,000
• C) $596,000
• D) $2,860,000

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Definitions:

Sensation

The process by which our sensory receptors and nervous system receive and represent stimulus energies from our environment.

Nervous System

The complex network of nerves and cells that transmit signals between different parts of the body, coordinating actions and sensory information.

Stimulus

An external factor or event that provokes a reaction or response in a biological organism.

Conditioning Stimuli

External or internal cues that, through learning, lead to conditioned responses in behavioral psychology.