Minor Video Has Opened a New Store Renting Videocassettes

question 46

Multiple Choice

Minor Video has opened a new store renting videocassettes.Fixed costs are $60,000,and the variable cost per unit is $1.50.The average sale is $5 per customer.Use the following axes to determine the break-even quantity graphically.Next,refine your solution by solving it algebraically.(Show your work for credit. )

• A)The break-even quantity is fewer than or equal to 10,000 rentals.
• B)The break-even quantity is more than 10,000 rentals and fewer than or equal to 20,000 rentals.
• C)The break-even quantity is more than 20,000 rentals and fewer than or equal to 25,000 rentals.
• D)The break-even quantity is more than 25,000 rentals.

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Definitions:

Privity of Contract

A principle in contract law stating that only parties involved in the contract have the right to sue to enforce their rights or claim damages.

Commission

A fee paid for services, typically a percentage of the transaction value, to an agent or salesperson for facilitating or completing a sale.

Agreement of Purchase and Sale

A legally binding contract between a buyer and seller detailing the terms and conditions of the sale of property.

Key Account Management

A strategic business approach focused on building and maintaining long-term relationships with a company’s most valuable customers.