The Figure Shows the Graphs of the Cost and Revenue

question 35

Multiple Choice

The figure shows the graphs of the cost and revenue functions for a company that manufactures and sells binoculars. Use the information in the figure to answer the question.

-Fewer than how many binoculars must be produced and sold for the company to have a profit loss?

• A) 2250 binoculars
• B) 750 binoculars
• C) 1500 binoculars
• D) 2700 binoculars

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Definitions:

Double-Declining-Balance

A method of accelerated depreciation that applies a constant rate of depreciation to a declining book value, resulting in higher depreciation expense in the early years of the asset's life.

Straight-Line

A method of depreciation that allocates the cost of an asset evenly over its useful life, reflecting a constant rate of expense over each period.

Depreciation Methods

Various approaches to allocating the cost of an asset over its useful life, such as straight-line, declining balance, and units of production methods.

Units-Of-Production

A depreciation method that allocates an asset's cost based on its usage, output, or production, rather than mere passage of time.