10

Multiple Choice

10. King Khan Corporation (KKC) manufactures kongs and kangs,the production of which requires considerable energy.Power generation department costs amounted to $4 million this month,for a total of 50 million kilowatt hours (kwh) supplied to the plant.Analysis shows that 40% of power generation costs are fixed.This month the Kong Dept.made 5 million kongs,each using 4 kwh,and the Kang Dept.made 4 million kangs,each using 6 kwh. If KKC uses the simplest algorithm to allocate power costs,which is true?

A) Kong will be charged $1.6 million
B) Kang will be charged $2.18 million
C) Kang's charge does not depend on Kong's usage
D) The simplest algorithm to allocate power costs will be insulating
E) All are true