Minor Video Has Opened a New Store Renting Videocassettes

question 96

Multiple Choice

Minor Video has opened a new store renting videocassettes. Fixed costs are $60,000, and the variable cost per unit is $1.50. The average sale is $5 per customer. Use the following axes to determine the break-even quantity graphically. Next, refine your solution by solving it algebraically.

• A) The break-even quantity is fewer than or equal to 10,000 rentals.
• B) The break-even quantity is more than 10,000 rentals and fewer than or equal to 20,000 rentals.
• C) The break-even quantity is more than 20,000 rentals and fewer than or equal to 25,000 rentals.
• D) The break-even quantity is more than 25,000 rentals.

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Definitions:

SOM

Share of market; the portion of SAM that your company is realistically likely to reach.

TAM

Total available market; the total market demand for a product or service.

Total Available Market

The overall revenue opportunity available or total demand for a product or service within a market.

Entrepreneur-Intended

Describes a person or action deliberately aimed at creating new ventures or businesses, typically with a plan and intention to grow.