A Company That Produces Baseball Caps Has Fixed Costs of $100,000,total

question 91

Multiple Choice

A company that produces baseball caps has fixed costs of $100,000,total variable costs of $40,000 for a production volume of 20,000 units.The average variable cost per unit is:

• A) $5.00.
• B) $2.50.
• C) $0.20.
• D) $0.40.
• E) $2.00.

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Definitions:

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution, due to constraints.

Systematic Evaluation

A structured process of assessing the performance, effectiveness, or quality of a system, program, or project using specific criteria and methodologies.

Escalation of Commitment

A behavioral pattern where individuals or groups continue to invest in a decision despite new evidence suggesting that the decision was wrong.

Perceived Costs

The assumed disadvantages, losses, or negative outcomes associated with a particular decision or behavior.