Gail Co Sells a Single Product for $40 Per Unit

question 24

Multiple Choice

Gail Co sells a single product for $40 per unit.Fixed costs are $160 000 and variable costs equal 75% of sales.If fixed costs increase by $10 000,Gail will have to increase sales by how much just to earn profits equal to those earned before costs increased?

• A)$100 000
• B)$40 000
• C)$80 000
• D)$20 000

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Definitions:

Social Contract

A theory in political philosophy suggesting that people consent, either implicitly or explicitly, to surrender some freedoms to an authority in exchange for protection of natural rights and maintaining social order.

Natural Rights

Fundamental rights that are believed to be inherent and inalienable to all humans, such as life, liberty, and property, often emphasized in Enlightenment thought.

Tabula Rasa

A philosophical theory meaning "blank slate" in Latin, proposing that individuals are born without built-in mental content, and all knowledge comes from experience or perception.

Philosophe

An intellectual of the 18th-century Enlightenment who sought to apply reason to the study of many areas of learning, including philosophy, history, science, politics, economics, and social issues.