Brewster Café Has Estimated That Fixed Costs Per Month Are

question 102

Multiple Choice

Brewster Café has estimated that fixed costs per month are $114,840 and variable cost per dollar of sales is 42%.Sales during June totaled $220,000.What level of sales is needed for a monthly profit of $31,900?

• A)$253,000
• B)$198,000
• C)$239,140
• D)$349,381

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Definitions:

MC Curve

The Marginal Cost Curve, depicting the increase in total cost that arises from producing one additional unit of a good or service.

Cost Curves

Graphs that show the cost of producing different quantities of a good or service, typically including average and marginal cost curves.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Total Cost

The total cost is the sum of fixed and variable costs incurred in the production of goods or services.