Asked by Stephen Sieczkowski on Jul 02, 2024
Verified
Given the cost formula, Y = $16,000 + $3.40X, total cost for an activity level of 4,000 units would be:
A) $13,600
B) $3,600
C) $29,600
D) $16,000
Cost Formula
A mathematical expression or equation used to calculate the total cost of production, taking into account fixed costs, variable costs, and output levels.
Activity Level
The degree to which resources are utilized in the production process, often measured in units produced, machine hours, or direct labor costs.
Total Cost
The sum of all expenses involved in producing a good or delivering a service, including fixed and variable costs.
- Develop an understanding and employ cost formulae to estimate costs at assorted production scales.
Verified Answer
Y = $16,000 + $3.40X
Y = $16,000 + ($3.40 x 4,000)
Y = $16,000 + $13,600
Y = $29,600
Therefore, the total cost for an activity level of 4,000 units would be $29,600.
Learning Objectives
- Develop an understanding and employ cost formulae to estimate costs at assorted production scales.
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