An Umbrella Manufacturing Company's Fixed Costs Are $275,000

question 23

Multiple Choice

An umbrella manufacturing company's fixed costs are $275,000. The variable cost per unit is $5 and each umbrella is sold at $10. How many units should the firm sell in order to break even?

• A) 1,819
• B) 5,500
• C) 18,000
• D) 27,500
• E) 55,000

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Definitions:

Demand Schedule

a table that shows the quantity of a good or service that consumers are willing and able to purchase at various price points.

Quantities

The amounts or numbers of a material or item available or required.

Various Prices

Describes a market scenario where identical or similar goods or services are sold at different price points.

Demand Schedule

A table or graph showing the quantity of a good that consumers are willing to purchase at each possible price.