Spencer Tools Would Like to Offer a Special Product to Its

question 48

Multiple Choice

Spencer Tools would like to offer a special product to its best customers.However,the firm wants to limit its maximum potential loss on this product to the firm's initial investment in the project.The fixed costs are estimated at $21,000,the depreciation expense is $11,000,and the contribution margin per unit is $12.50.What is the minimum number of units the firm should pre-sell to ensure its potential loss does not exceed the desired level?

• A)1,220 units
• B)1,680 units
• C)2,215 units
• D)2,560 units
• E)2,750 units

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Definitions:

Forces and Energy

Fundamental concepts in physics, with forces being interactions that change the motion of objects and energy being the capacity to do work.

Gravitational Pull

The force by which a planet or other body draws objects toward its center.

Electromagnetic Energy

Various forms of energy, including light, infrared, and ultraviolet radiation.

Igneous Rock

A rock that formed by solidification of molten material (magma).