Lorimar Watch Company Manufactures Travel Clocks

question 74

Multiple Choice

Lorimar Watch Company manufactures travel clocks. The daily marginal cost function associated with producing these clocks is where is measured in dollars/unit and denotes the number of units produced. Management has determined that the daily fixed cost incurred in producing these clocks is $140. Find the total cost incurred by Lorimar in producing the first 300 travel clocks/day.

• A) $2,216
• B) $815
• C) $42,000
• D) $2,076
• E) $1,340

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Definitions:

Controllable Costs

Costs that can be influenced or controlled by a specific manager or department within an organization.

Unfavorable Controllable Margin

A financial metric indicating that costs or expenses have exceeded budgeted amounts within a manager's control, negatively impacting profitability.

Cost Over Budget

The amount by which actual spending exceeds the planned or budgeted amount.

Sales Exceeding Budget

This indicates a financial scenario where actual sales revenue surpasses the projected figures in the budget, often viewed positively as it suggests higher profitability.