The Fixed Cost of Allied Breads, a Bread Baking Company

question 49

Multiple Choice

The fixed cost of Allied Breads, a bread baking company, is $200,000 per year. The cost of equipment and labor to make one packet of bread is $3. If the breakeven point of the company is 100,000 packets of bread, Widget Corp. needs to sell its bread packets at a price of _____ per packet to make profits.

• A) at least $7
• B) at least $6
• C) less than $4
• D) more than $5

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Definitions:

Corporate Level

Pertains to the strategic scope of an organization as a whole, encompassing all its divisions and products, and focusing on overall direction and goals.

Product Modification

A strategy where a company makes minor changes or improvements to a product to increase its appeal or to reach a different market segment.

Category Development Index

Category Development Index (CDI) measures the sales performance of a category within a specific market relative to the average market performance.

Brand Development Index

A measure of the sales strength of a brand within a specific market or demographic group.