DeLong Inc

question 27

Multiple Choice

DeLong Inc.has fixed operating costs of $470,000,variable costs of $2.80 per unit produced,and its products sell for $4.00 per unit.What is the company's break-even point,i.e.,at what unit sales volume would income equal costs?

• A)391,667
• B)411,250
• C)431,813
• D)453,403

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Definitions:

Foreign Exchange

The exchange or swapping of one type of currency for another.

Absolute Purchasing Power Parity

A theory suggesting that the exchange rate between two currencies should equal the ratio of the countries' price levels for a fixed basket of goods and services.

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, where stocks are bought and sold.

Relative Purchasing Power Parity

An economic theory that states the rate of exchange between two currencies will adjust to reflect changes in the price levels of the two countries.