At the Break-Even Point of 2,000 Units, Variable Costs Are

question 118

Multiple Choice

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000.How much is the selling price per unit?

• A)$43.50
• B)$11.50
• C)$16.00
• D)$27.50

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Definitions:

Implicit Cost

The monetary income a firm sacrifices when it uses a resource it owns rather than supplying the resource in the market; equal to what the resource could have earned in the best-paying alternative employment; includes a normal profit.

Forgone Rent

The potential income lost by choosing to use a property or resource in a way that is not financially optimal, such as using land for personal use instead of renting it out.

Rental Payments

Regular payments made by a tenant to an owner for the use of the owner's property or land.

Accounting Profit

The total revenue of a firm less its explicit costs; the profit (or net income) that appears on accounting statements and that is reported to the government for tax purposes.