Tim Marlow, the Owner of the Clock Works, Wanted to Know

question 144

Multiple Choice

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Marlow knew that he had total fixed costs of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor and materials. If the price Marlow charges for each of his clocks is $40, what is his break-even point quantity?

• A) 100 clocks
• B) 334 clocks
• C) 500 clocks
• D) 1,000 clocks
• E) 10,000 clocks

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Definitions:

Categorical Syllogism

A deductive argument with two premises and three terms, each of which occurs exactly twice in two of the three propositions.

Deductive Argument

A type of logic where specific conclusions are drawn from general principles or premises, with the conclusion necessarily following from the premises.

Deductive Argument

A logical process in which a conclusion follows necessarily from the given premises.

Valid

A deductive argument where the form is such that the conclusion must be true if the premises are assumed to be true.