A Company Is Considering Producing an Item That Can Be

question 5

Multiple Choice

A company is considering producing an item that can be sold for $37.50 per unit.If the fixed costs for setting up production are $225,000 and the variable cost per unit for the item is $35.00 then the break-even volume for this item is

• A)6,000 units
• B)6,429 units
• C)72,500 units
• D)90,000 units

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Definitions:

Cheese

A dairy product derived from milk and produced in a wide range of flavors, textures, and forms by coagulating the milk protein casein.

Opportunity Cost

The sacrifice of prospective advantages from other possibilities when one option is selected.

International Trade

The exchange of goods and services between countries, which can involve exports, imports, and the trading of resources.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others, leading to more efficient trade possibilities.