After Reviewing Past History, You Have Assembled the Following Table

question 34

Multiple Choice

After reviewing past history, you have assembled the following table showing the frequency of certain levels of sales over the past 40 months. If the largest random number used to represent sales of 300 units is 1.00, what will be the smallest number used to represent sales of 300 units?
$$\begin{array} { | c | r | l | } \hline \text { Sales (units) } & \text { Frequency } & \text { Corregonding Randam Numbers } \\\hline 100 & 12 & \\\hline 150 & 6 & \\\hline 200 & 8 & \\\hline 250 & 4 & \\\hline 300 & 10 & ? ? \leq x \leq 1\\\hline\end{array}$$

• A) 0.1000
• B) 0.3000
• C) 0.5000
• D) 0.6500
• E) 0.7500

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Definitions:

Fixed Overhead

Regular, fixed costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Capacity

The maximum amount of goods or services a company can produce or deliver in a given period with existing resources.

Allocation Base

A criterion or measure used for distributing overhead costs among various products, services, or departments within a business.

Traditional Costing

A costing method that allocates overhead based on a single predetermined rate, usually ignoring the varying demands different products place on resources.