Use the Information Below to Answer the Following Question(s)

question 104

Multiple Choice

Use the information below to answer the following question(s) .Brian O'Neil intends to sell his customers a special round-trip airline ticket package.He is able to purchase the package from the airline carrier for $400 each.The airline intends to reimburse Brian for any unsold ticket packages.The round-trip tickets will be sold for $500 each.Brian has a tax rate of 30% on his business income.
-What would his break-even point be assuming Brian incurred $31,200 in fixed expenses?

• A)312 packages
• B)232 packages
• C)125 packages
• D)110 packages
• E)100 packages

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Definitions:

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.

Total Variable Cost

The sum of all variable costs associated with the production of a given level of output.

Total Fixed Cost

The sum of all costs required to produce any product or service that does not change with the level of output.

Average Fixed Costs

Average fixed costs are the total fixed costs of production divided by the quantity of output produced, which decreases as production increases.