Use the Following to Answer the Questions Below

question 12

Multiple Choice

Use the following to answer the questions below.
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. Table A.1
-Use the information in Table A.1.Assume the fixed costs and sales price in both locations are constants and the variable costs in San Francisco are as shown in the table.By how much would the variable cost in Tuttle have to rise to give both locations an identical break-even point for the Regular model?

• A)$0.40
• B)$5.40
• C)$10.40
• D)$15.40

---

Definitions:

Target Marketing

The process of identifying and communicating with specific segments of the market that are considered more likely to buy a particular product or service.

Mass Production

A manufacturing method that produces large quantities of standardized products, often on assembly lines, enabling economies of scale and cost reduction.

Mass Marketing

A marketing strategy aiming to appeal to a large, general audience by using widespread distribution and media channels.

Confidence Interval

A span of values obtained from statistical samples, which is probable to include the value of an unknown population parameter.