Chris Muss is going to sell Ad-hoc compact disks for $40 a box; one box is considered to be one unit.The disks cost Chris $10 a unit.She is planning to rent a booth at the up-coming Area Computer Show.She has three options for attending the show: 1.paying a fixed fee of $3,000;
2.paying a $1,000 fee plus 10% of her revenue made at the convention, or;
3.paying 25% of her revenue made at the convention.Which of the following statements is TRUE?
A)CVP analysis can show that the risks are identical in each case.
B)The break-even point is the identical in each case.
C)Fixed costs are inherent in all of the options.
D)One of the options will allow Chris Muss to break-even, even if she doesn't sell any disks, assuming she can return any unsold disks for a full refund.
E)Operating income per unit is the same in each case, as both selling price and costs are the same.

Question

Quizplus · Accepted Answer

The Answer of Chris Muss is going to sell Ad-hoc compact disks for $40 a box; one box is considered to be one unit.The disks cost Chris $10 a unit.She is planning to rent a booth at the up-coming Area Computer Show.She has three options for attending the show: 1.paying a fixed fee of $3,000;
2.paying a $1,000 fee plus 10% of her revenue made at the convention, or;
3.paying 25% of her revenue made at the convention.Which of the following statements is TRUE?
A)CVP analysis can show that the risks are identical in each case.
B)The break-even point is the identical in each case.
C)Fixed costs are inherent in all of the options.
D)One of the options will allow Chris Muss to break-even, even if she doesn't sell any disks, assuming she can return any unsold disks for a full refund.
E)Operating income per unit is the same in each case, as both selling price and costs are the same.

Chris Muss Is Going to Sell Ad-Hoc Compact Disks for $40