Minor Video Has Opened a New Store Renting Videocassettes

question 45

Multiple Choice

Minor Video has opened a new store renting videocassettes.Fixed costs are $60,000,and the variable cost per unit is $1.50.The average sale is $5 per customer.Use the following axes to determine the break-even quantity graphically.Next,refine your solution by solving it algebraically.(Show your work for credit. )

• A)The break-even quantity is fewer than or equal to 10,000 rentals.
• B)The break-even quantity is more than 10,000 rentals and fewer than or equal to 20,000 rentals.
• C)The break-even quantity is more than 20,000 rentals and fewer than or equal to 25,000 rentals.
• D)The break-even quantity is more than 25,000 rentals.

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Definitions:

FedEx

An international courier company from America, celebrated for its expedited shipping service and for introducing a tracking system that allows for live updates of a parcel's location.

Aggregated Inventories

The combined total of all types of inventory within an organization or across a supply chain.

Finished-Goods Inventories

Stock of completed products ready for sale or shipment to customers, held by a company at any given time.

Annual Holding Cost

The total expenses associated with storing inventory over the course of a year, including warehousing, insurance, spoilage, and obsolescence.