Figure 11-7
-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 11-7a 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.

Question

Figure 11-7
-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 11-7a 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.

Quizplus · Accepted Answer

The Answer of  Figure 11-7
-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 11-7a 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.

Figure 11-7 -Suppose You Are the Owner of a Picture Frame Store