Which of the Following Assumptions Is Made When Declaring That

question 19

Multiple Choice

Which of the following assumptions is made when declaring that the break-even probability of collection is lower for customers with repeat orders?

• A)The discount rate is fairly high
• B)The cost of the item will continually decline
• C)The sales price of the item will continually increase
• D)Payment on the first order insures payments on subsequent orders

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Definitions:

Unit Price

The cost of a single unit of product or measure, which enables comparison of costs among different sizes or types of packages.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which includes materials, labor, and other variable costs.

Break-even Chart

A graphical representation showing the point at which total costs and total revenue are equal, thus indicating no profit or loss.

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance premiums.