Gould Enterprises Sells Computer Disks for $1

question 94

Multiple Choice

Gould Enterprises sells computer disks for $1.50 per disk. Unit variable expenses total $0.90. The breakeven point in units is 3,000 and budgeted sales in units are 4,300. What is the margin of safety in dollars?

• A) $4,500
• B) $1,950
• C) $2,580
• D) $780

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Definitions:

Marginal Cost Curve

A graphical representation showing how the marginal cost of production varies with the quantity of output produced.

Demand Curve

A visual depiction that illustrates the correlation between a product's price and the amount consumers are willing to buy.

Total Cost Curve

A graphical representation showing how the total cost of producing a good changes as the quantity produced changes.

Marginal Revenue Curve

A graph that shows the change in total revenue for each unit sold, illustrating how marginal revenue changes as output changes.