A Company Has Fixed Costs of $900 and a Per-Unit

question 11

Multiple Choice

A company has fixed costs of $900 and a per-unit contribution margin of $3. Which of the following statements is true?

• A) Each unit "contributes" $3 toward covering the fixed costs of $900.
• B) The situation described is not possible and there must be an error.
• C) Once the break-even point is reached; the company will increase income at the rate of $3 per unit.
• D) The firm will definitely lose money in this situation.
• E) Each unit "contributes" $3 toward covering the fixed costs of $900 and once the break-even point is reached, the company will increase income at the rate of $3 per unit.

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Definitions:

Bogus Pipeline Technique

A psychological experimental technique designed to elicit truthful responses by convincing participants their true attitudes are being measured via a fake polygraph test.

Convincing People

The act of persuading or influencing others to believe or accept certain ideas or perspectives.

Unethical Deception

Dishonest actions or statements that violate moral principles and do not adhere to ethical standards.

Lie Detector

A device or procedure designed to detect lies by measuring physiological responses believed to accompany deception, such as heart rate, blood pressure, and galvanic skin response.