Wimpy Incorporated Produces and Sells a Single Product

question 1

Multiple Choice

Wimpy Incorporated produces and sells a single product. The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit. The fixed expense is $366,915 per month.The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

• A) $601,500
• B) $366,915
• C) $636,408
• D) $940,808

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Definitions:

Euro

The official currency of 19 out of the 27 European Union countries, which forms the Eurozone.

Potential Arbitrage

An opportunity to buy an asset at a low price in one market and sell it at a higher price in another, profiting from the difference.

Generalized Fisher Effect

The theory suggests that the real interest rate is independent of monetary measures, relating nominal interest rates in one country to expected inflation rates.

Triangle Arbitrage

A method of profiting from the inconsistency in exchange rates between three currencies in the foreign exchange market by converting them sequentially.