Answer the Following Questions Using the Information Below:
Warne's Flipper

question 176

Multiple Choice

Answer the following questions using the information below:
Warne's Flipper Company sells several products.Information of average revenue and costs is as follows:
$\begin{array}{lr}\text { Selling price per unit } & \$ 25.00 \\\text { Variable costs per unit: } & \\\text { Direct material } & \$ 5.00 \\\text { Direct manufacturing labour } & \$ 1.80 \\\text { Manufacturing overhead } & \$ 0.80 \\\text { Selling costs } & \$ 2.00 \\\text { Annual fixed costs } & \$ 96000\end{array}$
-All of the following are assumed in the above analysis EXCEPT:

• A)fixed costs increase when activity increases.
• B)a constant product mix.
• C)all costs can be classified as either fixed or variable.
• D)cost and revenue relationships are reflected accurately.

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Definitions:

Surplus

When the quantity supplied of a commodity surpasses the quantity demanded, often resulting in a decrease in price to balance the disparity.

Monopolist

An individual or entity that has exclusive control over the production and selling of a particular good or service.

Deadweight Loss

The decrease in economic effectiveness due to the inability to achieve or the unachievable status of market equilibrium for a specific good or service.

Marginal Cost

An elevation in the cumulative expense resulting from manufacturing one more unit of a product or service.