Davis Corporation Has Provided the Following Production and Total Cost

question 172

Multiple Choice

Davis Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total monthly fixed manufacturing cost is:

• A)$130,000
• B)$177,600
• C)$34,800
• D)$225,200

---

Definitions:

Expansionary Monetary Policy

Government actions to increase the money supply in an effort to cut the cost of borrowing, which encourages business decision makers to make new investments, in turn stimulating employment and economic growth.

Money Supply

The total amount of monetary assets available in an economy at a specific time.

Cost of Borrowing

The total expenses that a borrower incurs to take out a loan, including interest payments, fees, and any other charges.

Cyclical Unemployment

People who are out of work because of a cyclical contraction in the economy.