Field Legal Services Is Trying to Determine the Variable and Fixed

question 29

Multiple Choice

Field Legal Services is trying to determine the variable and fixed elements of its service overhead.The following data have been collected from recent activity:
$\begin{array} { l r r }&\text { Total Service Overhead}&\text { Cases Worked }\\ \text { March } & 22,900 & 112 \\ \text { April } & 20,800 & 98 \\ \text { May } & 26,400 & 138 \end{array}$
The formula for total service overhead costs is

• A) $5,600 + $140 per case.
• B) $5,600 + $40 per case.
• C) $7,823 + $134.62 per case.
• D) $7,080 + $140 per case.

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Definitions:

Annual Fixed Costs

The total fixed costs incurred by a business within a year, inclusive of expenses that do not fluctuate with production or sales volume.

Average Operating Assets

An efficiency metric calculated by averaging the value of a company's operational assets over a period, often used in rate of return calculations.

Direct Material Measures

Quantitative assessments used to determine the amount of direct materials required for production.

Financial Measures

Quantitative metrics used to assess a company's financial health and performance, such as income, cash flow, and profitability ratios.