Hanalei Fishing Trips Is Operating at Its Break-Even Point of 4,200

question 103

Multiple Choice

Hanalei Fishing Trips is operating at its break-even point of 4,200 fishing trips per year.Which of the following statements is true?

• A)The amount of the company's total costs equals the amount of its revenues.
• B)The company's fixed costs equal its variable costs.
• C)The company's profit is equal to its contribution margin.
• D)Assuming no other changes, if the company sold fewer trips, it will earn a higher contribution margin per trip.

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Definitions:

Financial Advantage

The benefit or edge that a business or individual has that allows them to generate more income or wealth compared to others.

Fixed Manufacturing Overhead

Regular, consistent expenses that do not vary with production levels, such as salaries of supervisors and rent for factory facilities.

Financial Advantage

The benefit obtained from making specific financial decisions or investments, often measured in terms of profit, savings, or a more favorable financial position.

Variable Costs

Expenses that change in proportion to the business activity level.