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A Manufacturing Company Is Considering Producing a New Product

Question 2

Multiple Choice

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. What would be the net income at 75% capacity?


A) loss $3,500
B) loss $250
C) loss $1,800
D) loss $1,875
E) loss $2,025

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