Question

Answer all these questions with the right answer letter next to each question number

1-A company's normal operating activity is to produce 570 units per month. During its first two months of operations, it produced 135 units per month. Following a great article about the product, product sales spiked to 2,300 units per month, but the spike only lasted for one month. Which of the following best approximates the company's relevant range?

Multiple Choice

A-520 – 580 units

B-135 – 2,300 units

C-570 – 2,300 units

D-135, 570, or 2,300 units

5-Star, Inc. used Excel to run a least-squares regression analysis, which resulted in the following output:

Regression Statistics
Multiple R	0.9834
R Square	0.9596
Observations	30

	Coefficients	Standard Error	T Stat	P-Value
Intercept	174,980	61,580	2.84	0.021
Production (X)	11.53	0.9265	12.44	0.000

What total cost would Star predict for a month in which production is 2,000 units?

Multiple Choice

A_$23,037

B_$63,433

C_$174,900

D_$198,040

7-Jasmine Corp. has a selling price of $25, variable costs of $20 per unit, and fixed costs of $29,000. Contribution margin is $80,000. How many units did Jasmine sell?

Multiple Choice

A_16,000

B_7,200

C_21,800

D_14,60

Answer 1

1

Relevant range is the normal range of activity within which the company operates.

The relevant range is close to 570 units per month.

Option A -520 – 580 units is correct

3
Fixed cost	174980
Unit variable cost	11.53
Total cost	198040	=174980+(2000*11.53)
Option D $198,040 is correct
5
Contribution margin	80000
Divide by Contribution margin per unit	5	=25-20
Units sold	16000
Option A 16,000 is correct