The following cost formula for total purchasing cost in a factory was developed using monthly data. [text

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The following cost formula for total purchasing cost in a factory was developed using monthly data.

\[\text { Purchasing cost }=\$ 56,000+(\$ 2 \times \text { Number of purchase orders })\]

Next month, 800 purchase orders are predicted. The total cost predicted for the purchasing department next month

a. is \(\$ 56,000\).

b. is \(\$ 1,600\).

c. is \(\$ 57,600\).

d. is \(\$ 800\).

e. cannot be determined from the above formula.

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Related Book For  book-img-for-question

Fundamental Cornerstones Of Managerial Accounting

ISBN: 9780333623183

1st Edition

Authors: Dan L. Heitger, Maryanne M. Mowen, Don R. Hansen

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