4
QuizMultiple Choice

Topic Test

Question 4 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

The manufacturing cost of an air-condioning unit is $544, and the full-replacement extended warranty costs $113. If the manufacturer sells 506,970 units with extended warranties and must replace 20% of them as a result, how much will the replacement costs be? (Note: Assume manufacturing costs and replacement costs are the same.)

Answer
A
$55,158,336
B
$11,457,522
C
$2,129,274
D
$66,717,252

Explanation

Twenty percent of 506,970 units is 506,970 × 0.20 = 101,394 replacements. Each replacement costs $544 to manufacture, so the total replacement cost is 101,394 × $544 = $55,158,336. The correct choice is $55,158,336.

AI-written and checked against the verified answer.

Previous
Next