Batterson Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the company's sales volume. In a recent month in which the sales volume was 28,000 units, the lease cost was $697,200.To the nearest whole dollar, what should be the total lease cost at a sales volume of 29,200 units in a month? (Assume that this sales volume is within the relevant range.)

Question

Quizplus · Accepted Answer

Since the lease cost is fixed and does not vary with sales volume, it will remain the same ($697,200) regardless of the change in sales volume.

Batterson Corporation Leases Its Corporate Headquarters Building