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:

RDBMS

Relational Database Management System, a type of database management system that stores data in tables with relationships between them.

DBMS

Acronym for Database Management System, a software system designed to store, manage, and retrieve data from databases.

Browser

Software used to access and navigate the Internet, displaying web pages and facilitating online communication.

Birthdate

The exact date when a person was born, typically expressed as day, month, and year.