Production in 2013 for California Manufacturing, a Producer of High

question 39

Multiple Choice

Production in 2013 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when 80 units were produced at a total cost of $800,000. The lowest point in production was in January when only 20 units were produced at a cost of $440,000. The company is preparing a budget for 2013 and needs to project expected fixed cost for the budget year. Using the high/low method, the projected amount of fixed cost per month is:

• A) $120,000
• B) $320,000
• C) $480,000
• D) $360,000

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Definitions:

Import Substitution

An economic policy aimed at reducing dependency on imported goods by encouraging the domestic production of these goods.

Capital-intensive Production

A production process that requires a higher proportion of capital, such as machinery and equipment, in comparison to labor, to produce goods and services.

School Attendance

The act of being present at an educational institution during scheduled classes or activities, often monitored for legal or policy requirements.

Microfinance

Financial services, including loans, savings, insurance, and training, provided to individuals or small businesses lacking access to traditional banking services.