Acme Dynamite Has $2000 of Variable Costs and $500 of Fixed

question 17

Multiple Choice

Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25.
If the price of dynamite drops to $10,should Acme continue to operate in the short run?

• A)No,because Price is less than Average Total Cost
• B)Yes,because Price is less than Average Variable Cost
• C)No,because Price is not greater than Average Total Cost
• D)Yes,because Price is greater than Average Variable Cost

Identify factors excluding cash payments in budgeting such as depreciation expense.

Understand the purpose and components of capital expenditure budgets.

Understand the components and importance of a cash budget.

Recognize different types of budgets within a corporate setting and their purposes.

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Definitions:

Absolute Advantage

A situation where an entity can produce a good or service more efficiently (using fewer resources) than another entity.

Opportunity Cost

The expense incurred by not choosing the next most favorable option during a decision-making process.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, a foundational concept in economics that emphasizes the potential benefits that are missed when choosing one option over another.

Bushel

A unit of measure for volume, used primarily in dry commodities trading, equivalent to about 8 gallons or 36.4 liters in the U.S.