Suppose That You Have Two Processes a and B for Producing

question 39

Multiple Choice

Suppose that you have two processes A and B for producing a widget.Process A has a fixed cost of $10,000 and per unit variable cost of $80.00.Process B has a fixed cost of $30,000 and the per unit variable cost is $40.00.The widget sells for $100 regardless of production process used.During the next three years (your planning horizon for the widgets) you expect the economy to be pretty good with sales of widgets to be at least 700 units per year.You will

• A)be indifferent between choosing Process A and B , because they both have the same break-even point.
• B)choose Process A since it has a low fixed cost.
• C)choose Process B, since it has low variable cost.
• D)choose either Process A or B, since both will result in same profit for the next three years.
• E)choose Process B, since it will have higher net profit than process A in the next three years.

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Student Body Proportions

The ratio or percentages of various groups within a school or college’s enrollment, such as by gender or race.

Freshmen

First-year students at a high school, college, or university.

Sample

A subset of individuals or observations taken from a larger population, used for statistical analysis.

Seniors

Older adults, often used to refer to the elderly population or to students in their final year of high school or college.