Young Corporation Has a High Probability of Operating at 40,000

question 5

Multiple Choice

Young Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours. The company's flexible budget revealed the following: $$\begin{array} { l c c c } & \underline { 30,000 \text { Hours } } & \underline { 40,000 \text { Hours } } & \underline { 50,000 \text { Hours } } \\\text { Variable costs } & \$ 135,000 & \$ 180,000 & \$ 225,000 \\\text { Fixed costs } & 720,000 & 720,000 & 720,000\end{array}$$ If Young operated at 35,000 hours, its total budgeted cost would be:

• A) $877,500.
• B) $945,000.
• C) $787,500.
• D) $997,500.
• E) $810,000.

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Definitions:

Reasoning Skills

The capability to think logically and solve problems through systematic analysis and evaluation.

Intellectual Potential

An individual's capacity to think, understand, learn, and make judgments or have ideas.

Nature Vs. Nurture

A debate concerning the relative importance of an individual's innate qualities versus personal experiences in determining or causing individual differences in physical and behavioral traits.

Correlation

A measure of the relationship between two variables, indicating how one may predict or relate to the other.