Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price.Let's assume that the demand for your pictures is strong,so 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).What is the quantity of picture frames you will need to sell to break-even?
A)200 picture frames
B)400 picture frames
C)800 picture frames
D)1,600 picture frames
E)2,000 picture frames

Question

Quizplus · Accepted Answer

The Answer of Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price.Let's assume that the demand for your pictures is strong,so 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).What is the quantity of picture frames you will need to sell to break-even?
A)200 picture frames
B)400 picture frames
C)800 picture frames
D)1,600 picture frames
E)2,000 picture frames

Suppose You Are the Owner of a Picture Frame Store