Plymouth Corp

question 113

Multiple Choice

Plymouth Corp.sells units for $100 each.Variable costs are $75 per unit,and fixed costs are $200,000.If Plymouth leases a new machine,fixed costs will increase by $60,000 a year,but production will be more efficient,saving $5 per unit.At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?

• A)5,000
• B)10,000
• C)10,400
• D)12,000

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Definitions:

Cacti

Desert plants known for their ability to store water, typically having thickened, fleshy parts adapted to conserve water and covered with spines for protection.

Plankton

Freshwater and marine organisms that are suspended on or near the surface of the water; includes phytoplankton and zooplankton.

Microscopic Organisms

Tiny living organisms, such as bacteria, viruses, protozoa, and some algae and fungi, that can only be seen with the aid of a microscope.

Freshwater

Water containing minimal amounts of dissolved salts, found in rivers, lakes, and streams.