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The Manhattan Company Sells Its One and Only Product for $89.00

question 52

Multiple Choice

The Manhattan Company sells its one and only product for $89.00 per unit.Variable costs per unit amount to $63.50,and total fixed costs are $3,697,500.If Manhattan increases its selling price to $95 how will this affect the breakeven point in units?

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Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output produced, reflecting the per unit cost of variable inputs.

Average Fixed Costs

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, a measure that decreases as production increases.

Average Variable Costs

The sum of all costs that fluctuate based on the amount of production, divided by the total units of output created.

Average Fixed Costs

The costs that do not vary with the level of output production, such as rent, salaries, and insurance.

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