Table 67 Table 67 Shows Cost Data for Lotus Lanterns, a Producer of |

question 150

Multiple Choice

Table 6.7
$$\begin{array} { | c | c | c | c | c | } \hline \begin{array} { c } \text { Quantity of } \\\text { Lanterns }\end{array} & \begin{array} { c } \text { Fixed Cost } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Variable Cost } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Average } \\\text { Total Cost } \\\text { (dollars) }\end{array} \\\hline 75 & 200 & 170 & 370 & 4.93 \\\hline 80 & 200 & 230 & 430 & 5.36 \\\hline 90 & 200 & & & 7.67 \\\hline 100 & 200 & 810 & & \\\hline 115 & 200 & & & 11.8 \\\hline 117 & 200 & 1264 & 1464 & 12.5 \\\hline 120 & 200 & 1480 & & \\\hline\end{array}$$ Table 6.7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 6.7.The average total cost of production when the firm produces 120 lanterns is _________.

• A) $1 680
• B) $72
• C) $14
• D) $12.3

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Definitions:

Direct Labor Rate

The hourly wage paid to workers who are directly involved in the production of goods or services.

Production Budget

A financial plan that estimates the number of units to be produced in a future period, factoring in sales forecasts and inventory requirements.

Master Budget

A comprehensive financial planning document that consolidates all of a company's budgets for sales, production, direct materials, direct labor, overhead, administrative, and other expenses.

Direct Labor

Wages and salaries for employees who are directly involved in producing goods or providing services.