Baker Corporation Has Provided the Following Production and Average Cost

question 90

Multiple Choice

Baker Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. $$\begin{array} { | l | r | r | } \hline \text { Production volume } & 1.000 \text { units } & 3.000 \text { units } \\\hline \text { Direct materials } & \$ 30.90 \text { per unit } & \$ 30.90 \text { per unit } \\\hline \text { Direct labor } & \$ 40.20 \text { per unit } & \$ 40.20 \text { per unit } \\\hline \text { Manufacturing overhead } & \$ 64.60 \text { per unit } & \$ 33.80 \text { per unit } \\\hline\end{array}$$ The best estimate of the total variable manufacturing cost per unit is:

• A)$89.50
• B)$18.40
• C)$71.10
• D)$30.90

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Definitions:

Liquidity Ratios

Financial metrics used to evaluate a company's ability to meet its short-term obligations, indicating its financial health.

Short-Term Debt

Financial obligations and loans that are due to be paid back within a year from the balance sheet date.

Measure

An evaluation or estimation of the nature, quality, or ability of someone or something.

Trend Analysis

A method used to analyze and track the movements or directions of data points, such as prices or sales over time, to forecast future trends.