If a Firm Has a Fixed Cost of $200,000,and a Variable

question 152

Multiple Choice

If a firm has a fixed cost of $200,000,and a variable cost of $130,000 at an output of one,how much is marginal cost at an output of one?

• A)$70,000
• B)$130,000
• C)$200,000
• D)$270,000
• E)There is insufficient information to answer the question.

Identify and describe the components of a situation analysis.

Recognize the characteristics of an effective mission statement.

Understand the purpose and key components of a marketing plan.

Comprehend the significance and frequency of strategic planning for firms.

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Definitions:

Degree of Total Leverage

A financial ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income, considering both operating and financial leverage.

Financial Risk

The possibility of losing money on an investment or business venture, including various types of risks like market risk, credit risk, and operational risk.

Business Risk

The exposure a company or investor faces due to uncertainties in the operating environment, impacting its profitability.

Contribution Margin

The selling price per unit, minus the variable cost per unit, indicating the contribution towards covering fixed costs and profit.