[The Following Information Applies to the Questions Displayed Below

question 68

Multiple Choice

[The following information applies to the questions displayed below.]
John Boyd Corporation manufactures and sells 1,000 tractors each month.The primary component in each tractor is the motor.John Boyd has the monthly capacity to produce 1,300 motors.The variable costs associated with manufacturing each motor are shown below:
Fixed manufacturing overhead per month (for up to 1,300 units of production) averages $27,000.Joan Reid,Inc.has offered to purchase 200 motors from John Boyd per month to be used in its own outboard motors.
-If Joan Reid's order is rejected,what will be John Boyd 's average unit cost of manufacturing each motor?

• A)$68 per unit
• B)$70 per unit
• C)$96 per unit
• D)Some other amount

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Definitions:

Eardrum

A slim barrier that divides the external ear from the internal ear, resonating when it encounters sound waves.

Tuning Fork Test

A medical test that uses the vibration of a tuning fork to assess hearing or vibratory sensation.

dB

A unit of measurement used to express the magnitude of sound pressure or electrical power on a logarithmic scale.

Intensity

The degree of strength, force, or concentration applied in a particular action or by a particular phenomenon, such as light, sound, or physical exercise.