Emerton 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 32,000 units, the lease cost was $716,800. To the nearest whole dollar, what should be the total lease cost at a sales volume of 30,900 units in a month? (Assume that this sales volume is within the relevant range.)

Question

Quizplus · Accepted Answer

The lease cost is fixed with respect to the company's sales volume, meaning it does not change with the number of units sold. Therefore, the total lease cost remains $716,800 regardless of the sales volume, as long as it is within the relevant range.

Emerton Corporation Leases Its Corporate Headquarters Building