CoTres's Brakes Is Introducing a New Revolutionary Brake-Pad for Vehicles

question 2

Multiple Choice

CoTres's Brakes is introducing a new revolutionary brake-pad for vehicles that will never wear out. CoTres's will sell the pads for $150 a pair and they will cost $100 in variable costs to produce. If cash fixed expenses are $2,500 per year and the depreciation and amortization expenses are $900 per year, then what is the accounting operating profit break-even point for the company?

• A) 86 pairs
• B) 28 pairs
• C) 57 pairs
• D) 68 pairs

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Definitions:

Good Or Service

Any tangible product (good) or intangible offering (service) that can be sold or provided in a market to satisfy the demand of a customer.

Marginal Revenue

The additional income received from selling one more unit of a product or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Output Level

The total quantity of goods and services produced in an economy over a specified period.