Gamach Corporation Is a Wholesaler That Sells a Single Product

question 49

Multiple Choice

Gamach Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $104.50 per unit. The best estimate of the total monthly fixed cost is:

• A) $102,000
• B) $518,900
• C) $556,800
• D) $481,000

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Definitions:

Negotiable

Something that can be discussed or altered in order to reach an agreement; in finance, refers to instruments like checks or bills of exchange that can be transferred to another party.

Optional Payment

A payment made by choice as opposed to requirement, often seen in loan agreements where the borrower may pay more than the minimum due.

Maturity Date

the specific date on which a financial instrument, such as a loan or bond, reaches its expiration and the principal is due to be repaid.

Promissory Note

A financial instrument containing a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.