Spencer Tools Would Like to Offer a Special Product to Its

question 48

Multiple Choice

Spencer Tools would like to offer a special product to its best customers.However,the firm wants to limit its maximum potential loss on this product to the firm's initial investment in the project.The fixed costs are estimated at $21,000,the depreciation expense is $11,000,and the contribution margin per unit is $12.50.What is the minimum number of units the firm should pre-sell to ensure its potential loss does not exceed the desired level?

• A)1,220 units
• B)1,680 units
• C)2,215 units
• D)2,560 units
• E)2,750 units

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Definitions:

Genetic Disorder

A disease or condition caused by an abnormality in an individual's DNA.

Females

Individuals of a species that are biologically capable of producing offspring.

Dominant-Recessive Genes Principle

A genetic principle where dominant genes overpower recessive genes in determining physical traits or the expression of certain conditions.

Sex-Linked Genes Principle

A concept in genetics where certain genes are carried on sex chromosomes, leading to traits or disorders being passed down through one's sex.