Fixed Costs Remain Constant at $400,000 Per Month

question 181

Multiple Choice

Fixed costs remain constant at $400,000 per month.During high-output months variable costs are $320,000,and during low-output months variable costs are $80,000.What are the respective high and low indirect-cost rates if budgeted professional labor-hours are 16,000 for high-output months and 4,000 for low-output months?

• A) $45.00 per hour; $120.00 per hour
• B) $45.00 per hour; $45.00 per hour
• C) $25.00 per hour; $20.00 per hour
• D) $56.20 per hour; $120.00 per hour

---

Definitions:

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to make inferences about the population from which the sample was drawn.

Sample Proportion

The quotient of the number of times an event occurs in a sample to the total number of observations in the sample.

Barack Obama

The 44th President of the United States, serving from 2009 to 2017, notable for being the first African American to hold the office.

Standard Deviation

A way of measuring how much variety or distribution exists among numerical values.