Process a Has Fixed Costs of $1000 and Variable Costs

question 95

Multiple Choice

Process A has fixed costs of $1000 and variable costs of $5 per unit.Process B has fixed costs of $500 and variable costs of $15 per unit.What is the crossover point between process A and process B?

• A)50 units
• B)200 units
• C)$2,500
• D)$5,000
• E)$9,500

Understand the relevance of incremental cash flows in capital budgeting.

Recognize the importance of considering depreciation and tax impacts in cash flow estimation.

Distinguish between relevant and irrelevant costs in project evaluation, including understanding sunk and opportunity costs.

Identify the elements necessary for initial outlay and working capital considerations in project analysis.

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Definitions:

Segments

Distinct groups of potential consumers divided based on various traits like demographics, needs, prioritization, or behavior in the market.

Similarities

Refers to the aspects or characteristics that are alike or comparable between two or more entities.

Segmenting

Segmenting, or market segmentation, involves dividing a target market into distinct groups of buyers with different needs, characteristics, or behaviors, who might require separate products or marketing strategies.

Marketing Actions

A set of strategies implemented by a company to promote and sell its products or services.