The Congress Company Has Identified Two Methods for Producing Playing

question 33

Multiple Choice

The Congress Company has identified two methods for producing playing cards. One method involves using a machine having a fixed cost of $10,000 and variable costs of $1.00 per deck of cards. The other method would use a less expensive machine If the selling price per deck of cards will be the same under each method, at what level of output will the two methods produce the same net operating income (EBIT) ?

• A) 5,000 decks
• B) 10,000 decks
• C) 15,000 decks
• D) 20,000 decks
• E) 25,000 decks

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Definitions:

Financial Relationships

The analysis and assessment of the connections between various financial metrics and entities, including investments, expenses, revenues, and profits.

Financial Theory

A branch of economics that aims to understand and explain how financial markets operate, the structure of capital markets, and the pricing of financial instruments.

Economics

The social science that studies how people use scarce resources to produce valuable commodities and distribute them among different people.

Mathematics

Mathematics is the abstract study of numbers, quantity, structure, space, and change, used as a tool in a wide range of disciplines.