Use the Information Below to Answer the Following Question(s)

question 76

Multiple Choice

Use the information below to answer the following question(s) .Dr.Mickey Finn performs a certain procedure for $400.00.The fixed costs are $8,000 and variable costs are $200.00 per procedure.
-What is the margin of safety assuming 100 procedures are performed?

• A)$16,000 or 40 times
• B)$20,000 or 50 times
• C)$24,000 or 60 times
• D)$40,000 or 100 times
• E)$50,000 or 110 times

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Definitions:

Cost Driver

A factor that causes a change in the cost of an activity, serving as a basis for allocating costs in activity-based costing.

Relationship

The connection or association between two or more entities, often referring to business partnerships or customer interactions.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true.

Cost Behaviour

The manner in which a cost changes as the related activity level changes, classified into fixed, variable, and mixed costs.