Dollar Deals Sells a Single Product That Has a Unit

question 75

Multiple Choice

Dollar Deals sells a single product that has a unit variable cost of $9 per unit.The company's total fixed costs are $220,000.The company estimates demand at various activity levels as follows: $\begin{array}{cc}\text { Units Dem anded } & \text { Unit Price } \\54,000 & \$ 15 \\65,000 & \$ 14 \\72,000 & \$ 13 \\82,000 & \$ 12\end{array}$ What price should Dollar Deals charge to maximize profits?

• A)$15
• B)$14
• C)$13
• D)$12

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Definitions:

Bad Debts

Unrecoverable amounts from debtors that are considered losses after all recovery attempts have been exhausted.

Insurance Settlement

The payment made by an insurance company to a policyholder following a claim, intended to cover losses or damages incurred.

Note Balance

The remaining amount owed on a promissory note after payments have been made.

Refinancing

Replacing an old loan with a new loan, typically with better terms, such as a lower interest rate.