Answer the Following Questions Using the Information Below

question 68

Multiple Choice

Answer the following questions using the information below:
Martha Manufacturing produces a single product that sells for $80. Variable costs per unit equal $32. The company expects total fixed costs to be $72,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.
-Suppose management believes that a $16,000 increase in the monthly advertising expense will result in a considerable increase in sales. Sales must increase by how much to justify this additional expenditure?

• A)200 units
• B)334 units
• C)500 units
• D)None of these answers are correct.

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Definitions:

Production Possibilities Curve

A graphical representation showing the maximum combination of goods or services that can be produced with a given set of resources and technology.

Efficiently

The manner of achieving a goal or completing a task with the minimum waste of time and effort.

Entrepreneurs

Individuals who, recognizing opportunities, take on the financial risk to start and manage businesses, driving innovation and economic development.

Profit-Seeking Decision Makers

Individuals or entities that make business decisions aimed at maximizing profits.