Grimaldi Chocolates projects its factory rent to be $8,000 in July when 4,000 pounds of candy are expected to be produced.If rent is a ﬁxed cost, and if production is expected to increase to 6,000 units in August, what is the expected cost of rent in August?
A)$12,000
B)$8,000
C)$7,000
D)$10,667
E)Not enough information is provided to determine the answer.

Question

Quizplus · Accepted Answer

The rent cost is a fixed cost, therefore it will not change with an increase in production. Therefore, the expected cost of rent in August will still be $8,000.

Grimaldi Chocolates Projects Its Factory Rent to Be $8,000 in July