Suppose That a Donut Shop Has $1,500 of Variable Costs

question 65

Multiple Choice

Suppose that a donut shop has $1,500 of variable costs and $2,500 of fixed costs when it produces 1,000 donuts and sells them for $1 per donut.Average total cost is equal to

• A) $1.50.
• B) $2.00.
• C) $4.00.
• D) $25.00.

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Definitions:

Breach of Contract

An act of failing to fulfill the duties, terms, or conditions stipulated in a contract, which may result in legal action or penalties against the offending party.

Liquidated Damages

refers to a predetermined sum agreed upon by the parties to a contract, to be paid as compensation in case of breach of contract.

Exemption Clause

A contract term that attempts to limit or exclude liability for certain events or damages.

Deposit Forfeiture

A legal or contractual process wherein a deposit made as part of a transaction is lost due to non-compliance with the terms of the agreement.