Fixed Costs for a Product Are $30,000

question 94

Multiple Choice

Fixed costs for a product are $30,000.The product itself sells for $3.00 and it costs $1.50 to make each product.How can the plant decrease the break-even point by 5000 units?

• A)Increase P, the price of the item, by $0.50.
• B)Increase TFC, the fixed costs for item, by $5000.
• C)Decrease P, the price of the item, by $0.50.
• D)Decrease TFC, the fixed costs for item, by $5000.

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Definitions:

Hypothetical Thinking

The ability to consider multiple possibilities and outcomes of situations that are not necessarily rooted in current reality.

Formal Operational Stage

The stage in Piaget's theory of cognitive development (beginning around age 12) where individuals develop the ability to think abstractly, reason logically, and plan systematically.

Cognitive Development

The study of how thinking, problem solving, and intelligence change and mature through childhood into adulthood.

Object Permanence

The understanding that objects continue to exist even when they cannot be perceived.