Table 7.2 -Table 7.2 Contains Price, Demand, and Cost Data for the for the Capri

question 128

Multiple Choice

Table 7.2
-Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its revenue from non-students under the single price policy?

• A) $300
• B) $360
• C) $450
• D) $540

Understand the concept of mixed costs and how to categorize costs into fixed and variable.

Apply the least-squares regression method to estimate cost formulas.

Prepare a budgeted income statement using the contribution format.

Determine the break-even point in total dollars for a company and analyze the effect of changes in the sales mix on this point.

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Definitions:

Initial Outlay

The initial investment amount or the upfront cost required to start a project or investment.

Sunk Cost

A cost associated with a project expended prior to making the decision to undertake that project (for example, the cost of research into the idea). Since sunk funds are already gone, they cannot alter future costs or benefits, and should not be included in the analysis leading to a decision.

Opportunity Cost

The benefit foregone by using an asset in a particular way. Usually the income or benefit it would produce in its next best use.

Cash Outflow

Money going out of a business or individual's account, typically to pay for expenses, investments, or acquisitions.