If the Fixed Cost of a Product Is $500 and the Gross

question 40

Multiple Choice

If the fixed cost of a product is $500 and the gross profit per unit is $100, then a firm's break-even point is:

• A) 400
• B) 5
• C) 4
• D) 1:5

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Definitions:

Direct Labor

The wages and benefits paid to workers who are directly involved in the production of goods or services.

Office Equipment

Assets like computers, printers, and furniture used in an office to facilitate work.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Indirect

Costs or actions not directly tied to the production or sale of goods, such as administrative expenses, marketing, and support services.