Detailed Answer
Answer (A) is correct. The behavior of the factory overhead cost with respect to units of finished goods produced for this company represents a fixed cost pattern. Fixed costs in total remain unchanged in the short run regardless of production level. The Y-axis intercept, or $542,000 in this case, represents the fixed portion. This number is not affected by the number of finished goods produced in the short run. For example, if 1 unit is number). If 10,000 units are produced, the cost would still equal $542,000 (rounded to the nearest whole number).