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:

Marginal Extraction Cost

The additional cost associated with extracting one more unit of a resource.

Treasury Bill

A short-term government security issued at a discount from the par value and pays no interest, maturing in a year or less.

Treasury Bond

Long-term government debt securities with a fixed interest rate and maturity of more than 10 years.

Short-Term

A period of time that is relatively brief, usually focusing on immediate or near-future events or goals, often contrasted with long-term perspectives.