Mitcham Ltd Has Observed That at an Activity Level of 10

question 7

Multiple Choice

Mitcham Ltd has observed that at an activity level of 10 000 units the maintenance cost is $13 000, and at 20 000 units the maintenance cost is $18 000. Using the high-low method, the cost formula for maintenance is:

• A) $6000 + $.60 x units.
• B) $6000 + $.1.54 x units.
• C) $5000 + $.60 x units.
• D) $1.54/unit.

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Definitions:

Shared Beliefs

Common values or perceptions held by members of a group, team, or organization that influence their behaviors and decision-making.

Behaviour Guide

A framework or set of instructions aimed at shaping or modifying human actions.

Rational Persuasion

A method of influencing others through the use of logical arguments and factual evidence.

Cost-benefit Value

The analysis or assessment of the anticipated costs and benefits of a particular project or decision.