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

question 6

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) 18000
• B) 5500
• C) 27500
• D) 55000
• E) 1819

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Definitions:

English Auction

A bidding process where the price ascends and the highest bid wins, commonly used in auction houses and online marketplaces.

Willingness To Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting the perceived value.

Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 (impossible) and 1 (certain).