The Congress Company Has Identified Two Methods for Producing Playing

question 36

Multiple Choice

The Congress Company has identified two methods for producing playing cards.One method involves using a machine having a fixed cost of $10,000 and variable costs of $1.00 per deck of cards.The other method would use a less expensive machine (fixed cost = $5,000) ,but with greater variable costs ($1.50 per deck of cards) .If the selling price per deck of cards is the same under each method,at what level of output will the two methods produce the same net operating income (EBIT) ?

• A)5,000 decks
• B)10,000 decks
• C)15,000 decks
• D)20,000 decks

---

Definitions:

Oil Exploration

The process of searching for oil, including surveying and drilling to discover reservoirs beneath the Earth's surface.

Civil Penalty

A fine or other financial penalty imposed by a governmental agency as punishment for violating laws or regulations.

Parking Violation

An infraction or offense committed by parking a vehicle in a restricted or prohibited area without permission.

Subsidies

Subsidies are financial assistance provided by governments to organizations, businesses, or individuals to support economic activities deemed beneficial for the public.