Answer the Following Questions Using the Information Below:
the Bovise

question 142

Multiple Choice

Answer the following questions using the information below:
The Bovise Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Bovise Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
$$\begin{array} { l r r } \text { Month } & \text { Cost } & \text { Hours } \\\text { January } & \$ 40,000 & 3,600 \\\text { February } & 38,500 & 3,000 \\\text { March } & 36,280 & 3,300 \\\text { April } & 38,000 & 3,500 \\\text { May } & 69,850 & 5,850 \\\text { June } & 45,000 & 4,250\end{array}$$
-What is the estimated total cost at an operating level of 3,100 hours?

• A) $71,133
• B) $39,600
• C) $36,607
• D) $63,687

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Definitions:

Interest-Rate Changes

Adjustments made by central financial authorities to the cost of borrowing money, which can influence economic activity and financial markets.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) periodically until the maturity date, at which time the principal is repaid.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures, calculated by considering all future coupon payments and the principal repayment.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often described as the weighted average time until all cash flows are paid.