Larsen Films' Is Analyzing Its Cost Structure

question 3

Multiple Choice

Larsen Films' is analyzing its cost structure.Its fixed operating costs are $470,000, its variable costs of $2.80 per unit produced, and its products sell for $4.00 per unit.What is the company's breakeven point, i.e., at what unit sales volume would income equal costs?

• A) 391,667
• B) 411,250
• C) 431,813
• D) 453,403
• E) 476,073

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Definitions:

Response Differentiation

A process in operant conditioning where behaviors are modified by being reinforced only when they meet a certain criterion.

Positive Reinforcer

A stimulus which, when presented after a behavior, increases the likelihood of that behavior being repeated.

Reinforce

To strengthen a behavior by providing a consequence that increases the likelihood of the behavior being repeated.

Avoidance Conditioning

A response that prevents the occurrence of a punisher. This increases the probability of a low-occurring response and maintains that response at a high level. The principle of avoidance conditioning states that a behavior will increase in frequency if it prevents a punisher from occurring.