Refer to Situation 33-1

question 44

Multiple Choice

Refer to Situation 33-1. If the prospective criminal sets the following values:
Ps = 60 percent
Loot = $10,000
Pp = 10 percent
I = $20,000
F = $25,000
AC = $10,000
The prospective criminal's expected benefit from committing the burglary is ______________ and his expected cost of committing the burglary is _______________. Economic theory tells us that under these circumstances,the prospective criminal ______________ commit the burglary.

• A) $6,000; $14,500; will not
• B) $6,000; $14,500; will
• C) $6,667; $6,000; will
• D) $17,500; $12,000; will

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, or insurance premiums.

Sales Volumes

The quantity or number of products sold or services rendered in a particular period of time.

Variable Overhead Cost Variance

The difference between the actual variable overhead costs incurred and the expected (or standard) costs, based on the actual level of activity.

Fixed Overhead Cost Variance

The difference between the actual fixed overhead costs incurred and the expected (or budgeted) fixed overhead costs.