Asked by Pamela Lorraine on Jul 14, 2024
Verified
If the price is $110 per unit,what is the break even amount of units for technology B?
A) 20
B) 25
C) 30
D) None-They would have to shut down
Break Even
The point at which total costs and total revenues are equal, resulting in no net loss or gain.
Fixed Costs
Costs that do not vary with the level of production or sales, such as rent, salaries, and equipment leases, remaining constant regardless of how much a company produces.
- Expound and ascertain the numerical threshold for breaking even, emphasizing its importance in decision-making for businesses.
- Examine the influences guiding the decision-making among different technologies or business approaches with respect to their financial outlay.
Verified Answer
RB
richard bryantJul 21, 2024
Final Answer :
B
Explanation :
To find the break-even amount of units for Technology B, we use the formula for break-even quantity: Fixed Costs / (Price - Marginal Costs). For Technology B, this is $250 / ($110 - $100) = $250 / $10 = 25 units.
Learning Objectives
- Expound and ascertain the numerical threshold for breaking even, emphasizing its importance in decision-making for businesses.
- Examine the influences guiding the decision-making among different technologies or business approaches with respect to their financial outlay.