Fixed Cost Per Unit Is $7 When 25,000 Units Are

question 136

Multiple Choice

Fixed cost per unit is $7 when 25,000 units are produced and $5 when 35,000 units are produced. What is the total fixed cost when nothing is produced?

• A)$130,000
• B)$200,000
• C)$12
• D)$175,000

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Definitions:

Corporate Vertical Marketing System

A structured marketing system in which a single company controls multiple levels of production, distribution, and sales within its organization.

Operating Capital

Funds used by a company to cover its day-to-day operational expenses, necessary for maintaining business operations.

Distribution Density

Refers to the number of places or outlets a product is available to consumers within a specific area.

Intensive Distribution

A level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.