Katrina's Bridal Shoppe Sells Wedding Dresses

question 96

Multiple Choice

Katrina's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,200, variable costs are $400, and fixed costs are $110,000. What is Katrina's operating income when 200 dresses are sold?

• A) $50,000
• B) $240,000
• C) $80,000
• D) $130,000

---

Definitions:

Agency Agreement

An agency agreement is a legal contract creating a fiduciary relationship whereby the first party ("the principal") agrees that the actions of a second party ("the agent") binds the principal to later agreements made by the agent.

Agents

Individuals or entities authorized to act on behalf of another person or entity in legal or business matters.

Contract

A legally binding agreement between two or more parties that outlines obligations and rights.

Principal

In a legal context, the principal is the party who grants authority to an agent to act on their behalf in legal or financial matters.