Answer the Following Questions Using the Information Below

question 192

Multiple Choice

Answer the following questions using the information below:

Southwestern College is planning to hold a fund raising banquet at one of the local country clubs. It has two options for the banquet:

Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band which will cost another $800. Tickets are expected to be $30 per person. Local business supporters will donate any other items required for the event.


-Option one: Fixed costs of $10,000 and a breakeven point of 500 units. Option two: Fixed costs of $20,000 and a breakeven point of 700 units.
Which option should you choose if you are expecting to produce 600 units?

• A) Option one as sales is higher than breakeven
• B) Option two as sales is lower than breakeven
• C) Option two as it would lead to a higher operating income
• D) Option one as fixed costs is more

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Definitions:

Conflict

An instance of opposition or disagreement between ideas, interests, or people.

Impersonal Situation

A scenario or context that lacks personal connection or emotional involvement.

Credibility

The quality of being trusted and believed in, often reflecting a person's reliability or the convincing power of an argument.

Authority Figure

An individual who holds power or influence, often in a leadership role, within a specific context.