The Controller at TellCo Is Examining Her Books

question 61

Multiple Choice

The controller at TellCo is examining her books. She determines that at the breakeven point of 5,000 units, variable costs total $4,000 and fixed costs total $7,000. Therefore, 5,001st unit sold will contribute ________ to profits. (Round the final answer to the nearest cent.)

• A) $0.80
• B) $0.60
• C) $1.40
• D) $2.20

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Definitions:

Queuing

Waiting in line as a means of distributing goods and services: a nonprice rationing mechanism.

Excess Demand

A situation where the quantity demanded of a good or service exceeds its supply at the current price.

Ration

To distribute or allocate a resource, good, or service in limited amounts, often during shortages or to ensure equitable distribution.

Good

A material item or service that satisfies a human want or need.