Concept explainers
a)
To determine: The total cost, total revenue, and fixed cost for the given quantity.
Introduction:
Fixed cost remains the same; it does not change with the capacity of production that is the company does not change with the amount of goods or services produced. Examples of fixed cost include rent, salary, and insurance.
The total sum of amount received by the firm on the sale of goods is known as total revenue.
b)
To determine: The break-even point for the given situation.
Introduction:
Break-even point is the analysis used to show the relationship between the total cost and total revenue to determine profits at several stages of output. The break-even point occurs when total cost and total revenue are equal.
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