Artis Sales has two store locations. Store A has fixed costs of $145,000 per month and a variable cost ratio of 60%. Store B has
fixed costs of $260,000 per month and a variable cost ratio of 30%. What is the break-even sales volume for Store A?A)$362,500. B)$241,667.
C)Cannot determine with the information given.
D)$405,000.
Credence is a good that has attributes that cannot be observed by the consumer even after purchasing the thus makes it difficult for them to access its utility such as expert services and medical procedures, automobile repairs, etc.
Here the seller has the option to change the quality ad quantity of the price by using his tactics and hence can cheat buyers with an inferior good. Like the automobile repair may be insufficient.
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $276,000 to $544,500 and would decrease the current variable costs of $60 by $15 per unit. The selling price of $100 is not expected to change.
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 544,500/ [(100-45)/100]