A Company Has $6

question 16

Multiple Choice

A company has $6.50 per unit in variable costs and $2.20 per unit in fixed costs at a volume of 40,000 units.If the company uses cost-plus pricing, which of the following should the company use to determine the price?

• A)The company should use a unit cost of $8.70 per unit only at a volume of 40,000 units.
• B)The company should use a unit cost of $8.70 at any volume level.
• C)The company should use a unit cost of $8.70 at any volume within the relevant range.
• D)The company should use a unit cost of $6.50 per unit only at a volume of 40,000 units.

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Definitions:

Eurozone

A monetary and economic union of 19 European Union countries that have adopted the euro as their common currency.

European Union

A political and economic union of 27 European countries that are located primarily in Europe, aiming to foster economic cooperation and create a barrier-free single market.

Common Currency

A common currency is a currency that is used by multiple countries, facilitating trade and economic policy coordination.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.