Rible Company Has Observed That at an Activity Level of 8,000

question 61

Multiple Choice

Rible Company has observed that at an activity level of 8,000 units the cost for maintenance is £15,000, and at 10,000 units the cost for maintenance is £16,500. Using the high-low method, the cost formula for maintenance is

• A)£15,000 plus £0.15 per unit.
• B)£9,000 plus £0.75 per unit.
• C)£1.65 per unit.
• D)£1.875 per unit.

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Definitions:

Least Profitable

Describes the product, service, or business segment that generates the smallest amount of profit relative to others.

Product Ranking

The process of ordering products based on criteria such as sales performance, profitability, or strategic importance.

Variable Selling Expense

Costs that vary directly with the level of sales, such as commissions and credit card fees, as opposed to fixed selling expenses like salaries.

Specialized Machine

Equipment designed for a specific, often complex, function or process within manufacturing or production, not readily substitutable.