A Producer with Only One Product Has Total Fixed Costs

question 187

Multiple Choice

A producer with only one product has total fixed costs of $15,000 per month. In addition, it cost the producer $100 in variable costs to produce each unit of his product (raw materials and direct labor cost) . The producer charges his wholesalers $125 per unit. What is the sales amount to break even?

• A) $70,000
• B) $75,000
• C) $80,000
• D) $85,000
• E) $90,000

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