-Suppose You Are the Owner of a Picture Frame Store

question 270

Multiple Choice

-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. 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 11-6 above shows that by selling 200 pictures, your picture frame store 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:

Trouble

A state of distress, difficulty, or need; situations that cause discomfort or problems.

Non-Compliance

Failure or refusal to act in accordance with set rules, regulations, or standards.

Fair Adjustment

An equitable modification or change made to resolve a dispute or correct an imbalance.

Inconvenience

A minor annoyance or difficulty that causes discomfort or trouble, often disrupting plans or activities.