(Appendix 2A)Donner Company Would Like to Estimate the Variable and Fixed

question 7

Multiple Choice

(Appendix 2A) Donner Company would like to estimate the variable and fixed components of its maintenance costs and has compiled the following data for the last five months of operations. Using the high-low method of analysis, the estimated total fixed cost per month for maintenance is closest to:

• A)$440
• B)$407
• C)$470
• D)$0

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Definitions:

Output

The total amount of products or services produced by a company, industry, or economy.

Marginal External Costs

The additional cost imposed on third parties not involved in a transaction or decision, for each additional unit produced or consumed.

Peach Canners

Peach canners are production facilities or workers involved in preserving peaches by canning them, which involves processing, sealing in an airtight container, and sterilizing to extend shelf life.

Market Efficiency

The extent to which market prices fully reflect all available information, making it impossible to consistently achieve higher returns.