After an Intensive Research and Development Effort, Two Methods for Producing

question 30

Multiple Choice

After an intensive research and development effort, two methods for producing playing cards have been identified by the Turner Company.One method involves using a machine having a fixed cost of $10, 000 and variable costs of $1.00 per deck of cards.The other method would use a less expensive machine (fixed cost = $5, 000) , but it would require greater variable costs ($1.50 per deck of cards) .If the selling price per deck of cards will be the same under each method, at what level of output will the two methods produce the same net operating income (EBIT) ?

• A) 5, 000 decks
• B) 10, 000 decks
• C) 15, 000 decks
• D) 20, 000 decks
• E) 25, 000 decks

---

Definitions:

Cloud Computing

Internet-based computing where data, software, and processing power are accessed over the web, rather than from personal computers or servers.

Cyber-Technique

Methods or approaches that utilize digital technology and cybernetics for achieving specific objectives or solving problems.

Serious Intent

A legal concept indicating that a party has a genuine and earnest intention to enter into a binding contract.

Angry

A strong feeling of displeasure or hostility, often resulting from frustration, injustice, or threat.