Chris Muss Is Going to Sell Ad-Hoc Compact Disks for $40

question 6

Multiple Choice

Chris Muss is going to sell Ad-hoc compact disks for $40 a box; one box is considered to be one unit.The disks cost Chris $10 a unit.She is planning to rent a booth at the up-coming Area Computer Show.She has three options for attending the show: 1.paying a fixed fee of $3,000;
2.paying a $1,000 fee plus 10% of her revenue made at the convention, or;
3.paying 25% of her revenue made at the convention.Which of the following statements is TRUE?

• A)CVP analysis can show that the risks are identical in each case.
• B)The break-even point is the identical in each case.
• C)Fixed costs are inherent in all of the options.
• D)One of the options will allow Chris Muss to break-even, even if she doesn't sell any disks, assuming she can return any unsold disks for a full refund.
• E)Operating income per unit is the same in each case, as both selling price and costs are the same.

---

Definitions:

Piece-rates

A payment method where workers are paid a fixed rate for each unit of production completed, incentivizing higher productivity.

Product Quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied needs; a measure of excellence.

Industrial Unions

Labor unions that represent all workers, skilled and unskilled, within an entire industry.

Craft Unions

Labor unions that represent workers in specific trades or crafts, focusing on specific skill sets and professions.