M Studios Retails Their Own Brand of Camera That They

question 58

Multiple Choice

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. If fixed costs increase by 10%, how many cameras per month would have to be sold to maintain a net income of $49,500?

• A) 950 units
• B) 875 units
• C) 850 units
• D) 925 units
• E) 900 units

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Definitions:

Vesicular Lava

Lava characterized by a rough, bubbly texture due to the escape of gases during solidification.

Scoria Cones

Volcanic cones made up of loose, dark-colored volcanic fragments called scoria, typically formed around vents of basaltic lava.

Volcanic Ash

Fine particles of rock and volcanic glass created by explosive volcanic eruptions.

Nonvesicular Basalt

Basalt rock characterized by a solid and dense structure without vesicles, which are small cavities formed by gas bubbles.