A Company Has Total Fixed Cost of $120,000

question 223

Multiple Choice

A company has total fixed cost of $120,000. Its variable cost per unit is $2.00 and its price per unit is $3.50. The break-even point in units is:

• A) 60,000.
• B) 80,000.
• C) 34,286.
• D) 21,818.
• E) Cannot be determined from the information provided.

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Definitions:

Power

The probability that a statistical test will correctly reject a false null hypothesis, or the test's sensitivity to detecting an effect.

Statistical Test

A procedure used to determine whether the observed data significantly deviates from a hypothesis.

Inferential Statistics

A branch of statistics that infers properties about a population based on a sample of data drawn from that population.

Descriptive Statistics

Values that organize and describe the characteristics of a collection of data, sometimes called a data set.