(Appendix 12B)Delta Company's Long-Run Average and Actual Machine-Hours for Last

question 8

Multiple Choice

(Appendix 12B) Delta Company's long-run average and actual machine-hours for last year appear below: Fixed maintenance costs of the company's maintenance service department are budgeted at $60, 000 per year.These fixed costs are incurred in order to support long-run average demand.How much of this cost should be charged to Department B at the end of the year?

• A)$30, 000
• B)$22, 500
• C)$24, 000
• D)$18, 000

---

Definitions:

Decreasing Rate

A situation in which the rate or speed of some process or action diminishes over time.

Payoffs

The outcomes or returns from a particular action or investment, often used in the context of game theory or decision-making.

Expected Values

A statistical concept that calculates the average outcome when an action is repeated many times.

Disability Insurance

A type of insurance that provides income in the event a worker is unable to perform their work and earn money due to a disability.