You Would Like to Know the Minimum Level of Sales

question 8

Multiple Choice

You would like to know the minimum level of sales that is needed for a project to be accepted based on its net present value.To determine that sales level you should compute the:

• A)contribution margin per unit and set that margin equal to the fixed costs per unit.
• B)contribution margin per unit.
• C)accounting break-even point.
• D)cash break-even point.
• E)financial break-even point.

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Definitions:

Marginal Cost

Marginal cost is the cost of producing one additional unit of a good or service, crucial for decision-making processes in economics and business.

Average Total Cost

The total cost divided by the number of goods produced, representing the per-unit cost of production.

Profit-Maximizing Monopoly

A market condition where a single seller dominates, aiming to achieve the highest possible profit by controlling prices and output.

Total Profit

The total income of a business after all expenses and costs have been deducted from its total revenue.