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

question 108

Multiple Choice

Use the information below to answer the following question(s) .Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Which of the following is a fixed cost for an automobile manufacturing plant?

• A)straight-line amortization on factory equipment
• B)electricity used by assembly-line machines
• C)sales commissions
• D)windows for each car produced
• E)labour cost of assembly line workers

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Definitions:

Producer Surplus

The gap highlighting the difference between the initial asking price by sellers for goods or services and the ultimately received price.

Specific Tax

A tax that is levied as a fixed amount per unit on a particular good or service.

Inelastic Demand

A situation where demand for a product or service is relatively unmoved or less sensitive to changes in price.

Elastic Supply

A situation where the quantity of a good supplied by producers changes significantly in response to a small change in price.