The Fricker Co

question 128

Short Answer

The Fricker Co. sells three products in a ratio of 3:2:6. The contribution margins for the units are $10, $25, and $30, respectively. Total fixed costs are $119,600.
How many of each product must be sold to realize a pre-tax profit of $39,000? $$\begin{array} { l l l } \text { a) } 450 ; & 300 ; & 900 \\\text { b) } 1,830 ; & 1,220 ; & 3,660 \\\text { c) } 1,380 ; & 920 ; & 2,760 \\\text { d) } 7,320 ; & 4,880 ; & 14,640\end{array}$$

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Definitions:

Monopolistic Competitor

A type of market structure where many firms offer products that are similar but not identical, allowing for some degree of market power and product differentiation.

Short Run

A period in economics during which some factors of production and costs are variable, while others remain fixed.

Long Run

In economics, a period in which all factors of production and costs are variable, allowing for full adjustment to changes.

Profit

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.