Use the Information Below to Answer the Following Questions -Refer to the Table Above

question 28

Multiple Choice

Use the information below to answer the following questions.
Unique Tables manufacture coffee tables made of recycled timber. Market research has suggested that there will be strong demand for the tables. Due to this, management is debating whether to lease a new turning machine to meet increased production. To assist in their decision-making, the management accountant has supplied the following information:
$\begin{array}{lll}&\text { Without }&\text { With }\\&\text { turning machine }&\text { turning machine }\\\text { Expected level of sales } & 1500 \text { units } & 1500 \text { units } \\\text { Sales price per unit } & \$ 150 & \$ 150 \\\text { Variable costs per unit } & \$ 120 & \$ 110 \\\text { Fixed costs } & \$ 7,500 & \$ 15,000\end{array}$
-Refer to the table above. As the level of sales increases above 1 500 units, the level of profit would increase:

• A)at the same rate with or without the turning machine.
• B)at a faster rate with the turning machine.
• C)at a faster rate without the turning machine.
• D)None of the above

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Definitions:

Statistically Significant Difference

A measurement indicating that an observed effect or difference in a study is unlikely to have occurred by chance.

Two Independent Groups

In statistical analysis, two groups of subjects that are randomly assigned and do not influence each other.

Paired Samples T-Test

A statistical test used to compare the means of two related groups to ascertain if there is a significant difference between them.

Productivity

The efficiency at which production inputs, such as labor and capital, are turned into outputs, often measured as the ratio of output to input over a specific period.