Diamonds in the Ruff Sells Only One Product at a Regular

question 11

Multiple Choice

Diamonds in the Ruff sells only one product at a regular price of $7.50 per unit.Variable expenses are 60% of sales,and fixed expenses are $30,000.Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales.How many sales (in dollars) were required to break even at the old price of $7.50 per unit?

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

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Definitions:

Closing Price

The final price at which a security is traded on a given trading day, representing the most up-to-date valuation of the security until trading resumes.

Trading Day

Refers to a day on which the stock exchanges are open for trading.

Broker Fee

A charge or commission a broker commands for their service in facilitating transactions, such as buying or selling securities.

Discount Broker

A broker who trades stocks, but does not give investment advice.