Ampro-Mag Is a Small Company That Makes Materials for Safely

question 262

Multiple Choice

Ampro-Mag is a small company that makes materials for safely controlling hazardous spills of all kinds.It sells these items as a neutralizing kit priced at $100.The costs of the materials that go into each kit are $45.It costs $5 in labor to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising in trade journals, and $3,500 for the monthly salary of its owner.What is Ampro-Mag's monthly break-even point in terms of number of neutralizing kits sold?

• A)47 neutralizing kits
• B)68 neutralizing kits
• C)75 neutralizing kits
• D)104 neutralizing kits
• E)310 neutralizing kits

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding costs directly related to production.

Differential Income

The difference in income between two alternative business decisions, used in assessing the financial viability of each option.

Special Stitching

Unique or customized sewing techniques used to enhance the design or functionality of a textile product.

Variable Cost

An expense that changes in direct proportion to the activity level or volume of production in a business.