Diamonds in the Ruff Sells Only One Product at a Regular

question 131

Multiple Choice

Diamonds in the Ruff sells only one product at a regular sales price of $7.50 per unit. Variable costs are 60% of sales, and fixed costs are $30,000. What is the break-even point in sales dollars?

• A) $12,000
• B) $18,000
• C) $50,000
• D) $75,000

---

Definitions:

Repurchase

The action of a company buying back its own shares from the marketplace, reducing the amount of outstanding stock.

Initial Investment

The original sum of money or capital used to purchase assets or start an investment portfolio at the outset.

Short 150 Shares

The action of borrowing 150 shares of a stock with the aim of selling them in the hope that the stock price will decline, allowing for profit upon repurchasing the shares at a lower price.

Initial Margin

The portion of the purchase price that an investor must deposit when buying securities on margin, serving as a form of collateral.