Suppose You Are the Owner of a Picture Frame Store

question 34

Multiple Choice

Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $50 (labor, glass, frame, and matting) . If your picture frame store sold 2,000 picture frames, what would your profit (or loss) be?

• A)a loss of $32,000
• B)$0-only able to break even
• C)$100,000 profit
• D)$108,000 profit
• E)$132,000 profit

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Definitions:

Respiratory Center

Group of nerve cells in the medulla oblongata that sends out nerve impulses on a rhythmic basis, resulting in involuntary inspiration on an ongoing basis.

Intercostal Nerves

Nerves located between the ribs that play a role in the respiratory process by controlling the muscles of the chest wall.

Alveolar Walls

Thin layers of tissue forming the air sacs in the lungs, where gas exchange with the blood takes place.

Spirometer

A device used to measure the volume of air inhaled and exhaled from the lungs to assess lung health.