You Are Considering Opening a Fast-Food Store

question 78

Multiple Choice

You are considering opening a fast-food store. Your fixed costs for the required land, building, parking lot paving, kitchen equipment, and neon sign will be $1,000,000. The variable cost will be $1.89 for servings which will sell for $2.89. How many servings must you sell to break even?

• A) 1,000,000
• B) 1,200,000
• C) 2,890,000
• D) 189,000
• E) Cannot be determined from the data given.

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Definitions:

Manufacturing

The process of converting raw materials or components into finished goods through the use of tools, human labor, machinery, and chemical processing.

Export

The sale and shipping of goods or services from one country to another.

Import

The act of bringing goods or services into a country from abroad for sale.

Zero-Sum Game

A situation in game theory where one participant's gain or loss is exactly balanced by the losses or gains of the other participants.