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

question 37

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 the product drops to $6 each,should this firm continue operation during the short run?

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

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Definitions:

Cellular Production

An approach to manufacturing where equipment and workstations are arranged in a close sequence that facilitates the processing of small batches of parts or products through a series of closely related operations.

Group Technology Codes

A classification system used in manufacturing to group parts into families based on similarities in design or manufacturing process.

Repetitive Layout

refers to a manufacturing layout design where equipment or workstations are organized according to the sequence of operations required to produce a particular product, optimizing for efficiency in high-volume production.

Unit Costs

The cost incurred to produce, store, or purchase one unit of a product or service.