Production Costs for Manufacturing T-Shirts Consist of a Fixed Cost

question 76

Multiple Choice

Production costs for manufacturing T-shirts consist of a fixed cost of $18,000 plus variable costs of $2 per shirt. Each T-shirt sells for $8 dollars. How many T-shirts must be sold for the company to break even?

• A)2,250
• B)3,000
• C)9,000
• D)5,625

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Definitions:

Product-market Segment

A specific group of customers within a broader market who share similar needs and preferences that a company targets with its products or services.

Anticipated Revenue

The expected amount of money that an organization expects to receive over a certain period, based on forecasts and historical data.

Segmentation Variable

Criteria used to divide a market into smaller, more homogenous groups of customers based on characteristics like demographics, psychographics, or behavior.

Metropolitan Statistical Area

A geographic region with a relatively high population density at its core and close economic ties throughout the area, commonly used for statistical purposes.