Suppose You Are the Owner of a Picture Frame Store

question 55

Multiple Choice

Suppose you are the owner of a picture frame store.Let's assume that the average price customers are willing to pay for each picture frame is $120.Also,suppose your fixed costs (FC) total $32,000 (real estate taxes,interest on a bank loan,etc. ) and unit variable cost (UVC) for a picture frame is $40 (labor,glass,frame,and matting) .Figure 13-10 above shows that by selling 800 picture frames,you will

• A)break even.
• B)earn a profit.
• C)incur a loss.
• D)have no fixed costs.
• E)have no variable costs.

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Definitions:

General Agreement

A broad consensus or collective understanding reached by different parties on a specific set of terms or conditions.