The State of Illinois Has Passed a Law Requiring That

question 13

Multiple Choice

The state of Illinois has passed a law requiring that every automobile be inspected at least once a year for pollution control.Anfang Enterprises is considering entering into this type of business.After extensive studies,Joseph Anfang has developed the following set of projected annual data on which to make his decision: $\begin{array}{lr}\text { Direct service labor } & \$ 363,000.00 \\\text { Variable service overhead costs } & 270,000.00 \\\text { Fixed service overhead costs } & 280,000.00 \\\text { Marketing expenses } & 120,000.00 \\\text { General and administrative expenses } & 170,000.00 \\\text { Minimum profit } & 90,000.00 \\\text { Cost of assets employed } & 500,000.00\end{array}$
Anfang believes that his company will inspect 100,000 automobiles per year.The company earns an average of 18.75 percent return on its assets.
The price to be charged for inspecting each automobile using the time and materials pricing method would be calculated as follows:

• A) ($913,000.00 ÷ 100,000) + {($913,000.00 ÷ 100,000) \(\times\) [($90,000 + $290,000) ÷ $913,000.00]}
• B) ($1,203,000.00 ÷ 100,000) + [($1,203,000.00 ÷ 100,000) \(\times\) ($90,000 ÷ $1,203,000.00)]
• C) ($1,203,000.00 ÷ 100,000) + [($500,000 ÷ 100,000) \(\times\) 0.1875]
• D) None of these

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Definitions:

Rectus Femoris

A muscle in the quadriceps group located in the thigh, responsible for extending the knee and flexing the thigh.

Tensor Fasciae Lata

A muscle of the thigh involved in stabilizing and moving the leg, and tightens the fascia around the thigh to aid in body movements.

Gluteus Maximus

The largest and outermost of the three gluteal muscles, involved in the movement of the hip and thigh.

Gluteus Medius

A muscle located on the outer surface of the ilium, involved in the rotation and abduction of the thigh.