Jupitor Surf Boards Has Annual Fixed Costs of $5,000 with a Variable

question 82

Multiple Choice

Jupitor Surf Boards has annual fixed costs of $5,000 with a variable cost of $10 per unit and a sales price of $20 per unit.Jupitor expects to sell 1,000 units this year without much trouble.However,Jupitor is concerned about the scenario that all costs will increase 10% this year.If that happens,what will be Jupitor's earnings before interest and taxes?

• A) $6,000
• B) $5000
• C) $4,000
• D) $3,500

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Definitions:

Intermediate Components

Components or parts used in the production process that are not final products but are incorporated into other goods.

Inventory Management Systems

Technologies and strategies used to oversee the ordering, storing, and use of a company’s inventory.

Production Schedules

Plans that outline the timing and sequence of manufacturing operations to meet production targets and manage resources efficiently.

EOQ Model

The Economic Order Quantity model is used to determine the optimal order size to minimize the total inventory costs.