Entertainment Central Makes Video Game Consoles,which It Sells for $500

question 62

Multiple Choice

Entertainment Central makes video game consoles,which it sells for $500.00.It estimates its variable costs to be $200.00 per console.It figures its fixed costs to be $600,000 per year.How many consoles does it have to sell to break-even?

• A) 2,000 consoles
• B) 1,200 consoles
• C) 3,000 consoles
• D) 2,500 consoles
• E) 6,000 consoles

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Definitions:

Supply Chain

The network of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.

Net Profit Margin

A financial ratio indicating the percentage of revenue that remains as net profit after all expenses are deducted from total revenues.

Leverage

The use of various techniques or borrowed capital (debt) to increase the potential return of an investment.

Outsourcing

Transferring a firm’s activities that have traditionally been internal to external suppliers.