A Firm Has Fixed Operating Costs of $253,750, a Sales

question 125

Multiple Choice

A firm has fixed operating costs of $253,750, a sales price per unit of $100, and a variable cost per unit of $65. The firm's operating breakeven point in dollars is ________.

• A) $725,000
• B) $700,000
• C) $906,250
• D) $390,385

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Definitions:

Supplies

One type of asset acquired by a firm; it has a much shorter life than equipment.

Issuance

The process of distributing or releasing something official, such as a document, stock, or currency.

Common Stock

Part of paid-in capital representing the basic ownership equity of the corporation. If the corporation has only one class of stock, it will be common stock.

Investors

Individuals or entities that allocate capital to various types of investments with the expectation of obtaining a future financial return.