The Lakeside Inn Is Considering Expanding Their Operations

question 293

Multiple Choice

The Lakeside Inn is considering expanding their operations. Fixed costs are estimated at $92,000 a year. The variable cost per unit is estimated at $22.50. The estimated sales price is $37.50 per unit. What is the cash break-even point of this project? (Round to whole units.)

• A) 6,133
• B) 6,420
• C) 6,667
• D) 7,000
• E) 7,180

---

Definitions:

Maturation

The process of growth and development, either in biological organisms or in organizations as they evolve and reach full potential.

Diffuse

To spread or scatter widely or thinly; often relating to the dissemination of ideas or technologies.

Try-demo Units

Sample products or systems that are offered for trial use to demonstrate their capabilities or features before a purchase decision is made.

Trialability

The degree to which a product or service can be experimented with on a limited basis before making a purchase decision.