Ampro-Mag Makes Materials for Safely Controlling Hazardous Spills of All

question 194

Multiple Choice

Ampro-Mag makes materials for safely controlling hazardous spills of all kinds. It sells these items as a neutralizing kit priced at $100. The costs of the materials that go into each kit are $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising in trade journals, and $3,500 for the monthly salary of its owner. What is Ampro-Mag's monthly break-even point in terms of number of neutralizing kits sold?

• A) 40 kits
• B) 52 kits
• C) 104 kits
• D) 116 kits
• E) 520 kits

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Definitions:

Least Cost Analysis

A method used to minimize costs of achieving a specific objective, commonly used in decision-making for choosing the most cost-effective option.

Short-Run Analysis

An examination of the performance or behavior of a firm or model over a short period, focusing on immediate costs and outcomes.

Cost Center Analysis

The process of evaluating the costs associated with a specific business unit or department, without directly attributing to revenue generation, aiming to optimize efficiency.

Logistics

The detailed coordination and implementation of complex operations involved in the movement, storage, and flow of goods from origin to destination.