The Owner of a Retail Store That Specializes in Sporting

question 91

Multiple Choice

The owner of a retail store that specializes in sporting equipment plans to buy TV ad time during a local station's showing of Coach's Corner, a weekly high school retrospective. The owner of the store has learned the show has a rating of 10, reaches 12,000 people in the primary target audience, and a 15-second spot costs $600. What is the cost per thousand (CPM) ?

• A) $20.00
• B) $40.00
• C) $50.00
• D) $60.00
• E) $70.00

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Definitions:

Per Unit

A term used to denote the cost or price of a single item or measure of a service or product.

Relevant Range

The range of activity within which the assumptions about fixed and variable costs are valid for a specific business.

Mixed Costs

Expenses that have both fixed and variable components, changing with the level of production or sales activity but not in direct proportion.

Differential Costs

The difference in cost between two alternative decisions or changes in levels of operation.