Chulo Ibsen Makes and Sells Hand-Forged Wrought Iron Firescreens for $125

question 51

Multiple Choice

Chulo Ibsen makes and sells hand-forged wrought iron firescreens for $125 each.He has determined that his fixed costs are $8,000,and his average variable costs per firescreen are $45.What is his break-even point in dollars?

• A)$8,000
• B)$10,000
• C)$12,500
• D)$22,550

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Definitions:

Incremental Sales

Incremental sales refer to the additional sales revenue gained from a particular sales activity or decision, beyond what would have been achieved otherwise.

Operating Expenses

Costs associated with the day-to-day operations of a business that are not directly tied to the production of goods or services.

Income Tax Rate

The proportion of a person's or organization's income that is owed to the government in taxes.

Capital Budgeting

The process of planning and evaluating investments in long-term assets to generate returns over time.