Figure 13-7B -Suppose You Are the Owner of a Picture Frame Store

question 174

Multiple Choice

Figure 13-7B
-Suppose you are the owner of a picture frame store. Assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting) . According to Figure 13-7 above, how much profit will your picture frame store make if it sells 400 picture frames?

• A) $48,000
• B) $32,000
• C) $16,000
• D) $0
• E) ($32,000)

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