Comfy Wheels Bus Company Produces Buses

question 79

Multiple Choice

Comfy Wheels Bus Company produces buses. In order to produce the seats for the buses, special equipment must be set up. The setup cost per frame is $35. The cost of carrying seats in inventory is $6 per seat per year. The company produces 90,000 buses per year. The number of seats that should be produced per setup in order to minimize the total setup and carrying costs is

• A) 933 seats.
• B) 2,050 seats.
• C) 1,025 seats.
• D) 513 seats.

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Definitions:

Variance

Variance is a statistical measurement that describes the spread of numbers in a data set, indicating how much the numbers differ from the average value.

Average Return

The mean amount of profit or loss generated by an investment over a given period.

Semi-strong-form Efficient

Semi-strong-form efficiency is a class of market efficiency that posits that all public information is already reflected in stock prices, making it impossible to consistently achieve higher returns by trading on that information.

Historical Prices

The past trading prices of a security or commodity, often analyzed to identify trends and patterns for future trading decisions.