Why do movie theaters sell tickets for an afternoon showing of a movie at a lower price than the 7 p.m. showing of the same movie?
A. To deal with the intangible characteristic of services
B. To minimize inventory losses
C. To deal with the incompatibility characteristic of services
D. To deal with the perishability of services
E. To make sure the service offered is consistent
Answer: D
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The Blaine Corporation is a highly automated manufacturer. At an activity level of 6,000 machine setups, total overhead costs equal $240,000. Of this amount, depreciation totals $80,000 (all fixed) and lubrication totals $72,000 (all variable). The remaining $88,000 of the total overhead cost consists of utility cost (mixed). At an activity level of 9,000 setups, utility cost totals $112,000.Assume that the relevant range includes all of the activity levels mentioned in this problem.If 7,800 setups are projected for the next period, total expected overhead cost would be closest to:
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