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Practice Test 2
You scored 90 out of 100
Question 1
Your answer is CORRECT.
Suppose you buy a piece of office equipment for $11,000.00. After 6 years you sell it
for a scrap value of $4,000.00. The equipment is depreciated linearly over 6 years. The
value of the piece of equipment after 2 years is (rounded to the nearest whole dollar)
a)
$4,000.00
b)
$9,000.00
c)
$9,727.00
d)
$10,417.00
e)
$8,667.00
f)
None of the above.

Question 2
Your answer is CORRECT.
A manufacturer has a monthly fixed cost of $60,000.00 and a production cost of $7 for
each unit produced. The product sells for $19 per unit. The cost function for this
situation is

c)
d)
e)
f)
None of the above.
Question 3
Your answer is CORRECT.
A company has fixed monthly expenses of $120,000.00 and production costs of $18 per
unit produced. They sell their product for $27. What is their profit on the production
and sale of 16,000 units?

Question 4
Your answer is CORRECT.
A manufacturer has a monthly fixed cost of $60,000.00 and a production cost of $19 for
each unit produced. The product sells for $34 per unit. Find the break-even point.

b)
c)
d)
e)
f)
None of the above.