Questions:
1. For Frank's Funky Sounds, units of production depreciation on the trucks is a
a. variable cost.
b. fixed cost.
c. mixed cost.
d. high-low cost.
2. Assume Intervale Railway is considering hiring a reservations agency to handle passenger reservations. The agency would charge a flat fee of $13,000 per month, plus $3 per passenger reservation. What is the total reservation cost if 200,000 passengers take the trip next month?
a. $613,000
b. $3.07
c. $600,000
d. $13,000
3. If Intervale Railway's fixed costs total $90,000 per month, the variable cost per passenger is $45, and tickets sell for $75, what is the breakeven point in units?
a. 1,200 passengers
b. 2,000 passengers
c. 225,000 passengers
d. 3,000 passengers