Answer the Following Questions Using the Information Below:
Piels Corporation

question 41

Multiple Choice

Answer the following questions using the information below:
Piels Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:
$\begin{array}{lr}\text { Direct materials } & \$ 90,000 \\\text { Direct labor } & 130,000 \\\text { Variable factory overhead } & 60,000 \\\text { Fixed factory overhead } & 140,000 \\\quad \text { Total costs } & \$ 420,000\end{array}$ Of the fixed factory overhead costs, $60,000 is avoidable.
-Assuming no other use of their facilities,the highest price that Piels should be willing to pay for 10,000 units of the part is ________.

• A) $420,000
• B) $280,000
• C) $340,000
• D) $360,000

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Definitions:

Indicator Variable

A numeric or categorical variable used in statistical models to represent subgroups or conditions.

Possible Values

The set of all potential outcomes or results that can arise from a specific event or experiment.

Significance Level

The likelihood of incorrectly discarding the null hypothesis in statistical scrutiny, often characterized by the alpha notation.

Multiple Regression Model

A statistical technique that models the relationship between a dependent variable and several independent variables to predict outcomes.