The Relevant Production Range for Challenger Trailers,Inc

question 149

Multiple Choice

The relevant production range for Challenger Trailers,Inc.is between 130,000 units and 180,000 units per month.If the company produces beyond 180,000 units per month,________.

• A) the fixed costs will remain the same, but the variable cost per unit may change
• B) the fixed costs may change, but the variable cost per unit will remain the same
• C) the fixed costs and the variable cost per unit will not change
• D) both the fixed costs and the variable cost per unit may change

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Definitions:

Capacity Analysis

The assessment of a company's ability to produce goods or deliver services, compared to its potential or actual demand.

Time-Driven Activity-Based Costing

A costing method that assigns costs based on the actual duration of activities rather than on estimated overhead rates.

Customer Support Department

A functional unit within an organization tasked with providing assistance and guidance to customers before, during, and after a purchase.

Matching Capacity

The process of aligning a company's production capability with the demand for its products to optimize efficiency and minimize costs.