Citizen Sells a Watch for $35 at a Fixed Cost

question 7

Multiple Choice

Citizen sells a watch for $35 at a fixed cost of $1 million per annum. Recent recession has seen jump in material cost to $20. What is the new break-even volume of watches per year?

• A) 28 571
• B) 50 000
• C) 66 667
• D) 6667
• E) 7000

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Definitions:

Simple Events

Events that cannot be broken down any further into simpler components in the context of probability.

Probabilities

The measure of the likelihood that an event will occur, often quantified as a number between 0 and 1.

Simple Events

An event in probability that consists of only one outcome or occurrence and cannot be broken down further.

Probabilities

The likelihood or chance that a particular event will occur, expressed as a number between 0 and 1.