Davis Ltd Has Observed That at an Activity Level of 10

question 3

Multiple Choice

Davis Ltd has observed that at an activity level of 10 000 units the maintenance cost is $22 000, and at 20 000 units the maintenance cost is $28 000. Using the high-low method, the cost formula for maintenance is:

• A) $16 000 + $.60 x units.
• B) $16 000 + $.1.54 x units.
• C) $6 000 + $.60 x units.
• D) $1.40/unit.

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Definitions:

Ethanol

A volatile, flammable, colorless liquid alcohol, used as a biofuel and in the manufacture of various chemicals and pharmaceuticals.

Food Supplies

The total amount of food available or stocked for consumption and distribution to meet the demands of the population.

Green Globes

A certification program focused on improving environmental performances of buildings through sustainable design and operations.

LEED

Leadership in Energy and Environmental Design; a widely used green building certification program that evaluates the environmental performance of a building.