Figure 11-6a -Suppose You Are the Owner of a Picture Frame Store.Let's

question 173

Multiple Choice

Figure 11-6a
-Suppose you are the owner of a picture frame store.Let's assume that the average price customers are willing to pay for each picture frame is $120.20.20.20.20.20.20.20.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 $40 (labor,glass,frame,and matting) .Figure 11-6a shows that by selling 800 picture frames,you will

• A) break even.
• B) earn a profit.
• C) incur a loss.
• D) have no fixed costs.
• E) have no variable costs.

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Definitions:

Formal Presentation

A structured display or speech to convey information or ideas effectively to an audience, often in a professional setting.

Balance Sheet

A summarization capturing the value of assets, liabilities, and equity from shareholders of a company at an exact moment.

Income Statement

A financial statement that shows a company's revenues, expenses, and profit over a specific period.

Cost Principle

An accounting principle that requires assets, liabilities, equity, and expenses to be recorded at their original cost.