Assume a Product Costs $5

question 95

Multiple Choice

Assume a product costs $5.The variable cost per unit is currently $4,and the fixed cost is $25,000.If the company can alter its production method such that the variable costs fall to $3.50 and the fixed costs rise to $30,000,what will happen to the breakeven point?

• A)It will rise and fall later.
• B)It will rise.
• C)It will remain the same.
• D)It will fall.

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Definitions:

Bill of Lading

A legal document between a shipper and carrier detailing the type, quantity, and destination of goods being shipped.

Contracted-for Shipment

An agreement to transport goods to a specified location under the terms of a contract.

Letter of Credit

A financial document issued by a bank guaranteeing a buyer's payment to a seller within a specified timeframe, providing security in international trade.

International Sale of Goods

Transactions involving the sale of goods between parties residing in different countries.