Luvmatics Plans to Produce a New Product -Use the Information in Table A

question 62

Multiple Choice

Luvmatics plans to produce a new product. Three different models are planned: the Regular, Large, and Jumbo. The fixed costs depend on which of two locations are used; in San Francisco the fixed costs would be $2.5 million per year, but in Tuttle the fixed costs would be $1.2 million. Sale prices and variable costs for the three models are shown in the table.
$$\begin{array} { | l | c | c | c | } \hline \text { Table A 1 } & & { \text { Model } } \\\hline \text { } & \text { Regular } & \text { Large } & \text { Jumbo } \\\text { Variable Cost} & \$ 5 \text { /unit }& \$ 7 \text { /unit } & \$ 10 / \text { unit } \\\text { Sale Price } & \$ 25 / \text { unit } & \$ 41 \text { /unit } & \$ 68 / \text { unit } \\\hline\end{array}$$
-Use the information in Table A.1.What is the difference in break-even points for the Large model between Tuttle and San Francisco?

• A) Fewer than 25,000 units
• B) Between 25,000 units and 40,000 units
• C) Between 40,000 units and 55,000 units
• D) More than 55,000 units

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Definitions:

Magnetic Field

An invisible field around magnetic materials where magnetic forces are exerted.

Voltage Drop Testing

A diagnostic process to measure the loss of electrical potential across a component or conductor, used to identify high resistance or faults in a circuit.

Continuity

The presence of a complete path for current flow in an electrical circuit, indicating that it is closed and conductive.

Fusible Elements

Components designed to melt or fuse when exposed to high temperatures, acting as a safety device in electrical or mechanical systems.