Break-Even Analysis

question 49

Multiple Choice

Break-even analysis. Binders-For-School Ltd is in the process of determining whether to purchase a high-capacity machine to make textbooks for the upcoming school year. The high-capacity machine will generate fixed costs of $10,000 per year versus the $2,000 fixed costs of using a low-capacity machine. The variable costs per unit when using the high-capacity machine will be $30. The company will charge $60 for each textbook and has determined that the high-capacity machine will be more economically beneficial if sales are greater than 800 books. What is the variable cost per unit under the low-capacity machine scenario?

• A) $20
• B) $40
• C) $60
• D) $80

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Definitions:

Fifth Amendment

An amendment to the U.S. Constitution that provides protection against self-incrimination, ensures due process of law, and other legal protections.

Civil Liberty

Civil liberty is the freedom of individuals to exercise traditional rights without unwarranted interference by the government, including freedom of speech, privacy, and due process.

Constitutional Right

Rights afforded to individuals as guaranteed by the Constitution, protecting citizens from governmental infringement.

Privacy

The state or condition of being free from being observed or disturbed by other people.