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:

Accounting Methods

Systems used by a company to keep track of its financial transactions and to prepare financial statements, such as cash basis or accrual basis accounting.

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