Dunrobin Company Sells a Single Product for $12

question 81

Multiple Choice

Dunrobin Company sells a single product for $12. Variable costs are $8 per unit and fixed costs total $360,000 at a volume level of 60,000 units. Assuming that fixed costs does not change, Dunrobin's break-even point would be:

• A)30,000 units.
• B)45,000 units.
• C)60,000 units
• D)90,000 units.
• E)negative because the company loses $2 on every unit sold.

---

Definitions:

Consumer

An individual or group who purchases goods and services for personal use.

Expected Utility

A theory in economics that calculates the anticipated utility resulting from different outcomes in risky or uncertain situations.

Utility

(Of a consumer) a measure of the satisfaction derived from consumption of goods and services.

Probability

The measurement of the likelihood of a specific event or outcome occurring.