Daisy Enterprises has revenues of $400,000, fixed costs of $100,000, and variable costs of $500,000. Daisy Enterprises:

Question

Quizplus · Accepted Answer

Daisy Enterprises should shut down immediately because its total costs ($600,000, which is the sum of fixed costs of $100,000 and variable costs of $500,000) exceed its revenues ($400,000). This means it cannot cover its variable costs, let alone make a profit, indicating an immediate shutdown is the most financially prudent decision.

Daisy Enterprises Has Revenues of $400,000, Fixed Costs of $100,000