Chulo ibsen makes and sells hand forged wrought iron

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89. Chulo Ibsen makes and sells hand-forged wrought iron firescreens for $125 each. He has determined that his fixed costs are $8,000, and his average variable costs per firescreen are $45. What is his break- even point in dollars? a. $22,550 b. $12,500 c. $10,000 d. $8,000 e. $5,875
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ANS: B [$8,000)/($125 – $45)] $125 = $12,500 PTS: 1 REF: 305 OBJ: 19-5 TYPE: App TOP: AACSB Analytic | TB&E Model Pricing 90. Which of the following statements describes a limitation associated with break-even analysis? PTS: 1 REF: 306 OBJ: 19-5 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 91. Which of the following statements about pricing strategies throughout the product life cycle is FALSE? PTS: 1 REF: 306 OBJ: 19-6 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 92. When Apple Inc. developed and introduced the iPhone it was unique as it essentially combined a cellu- lar phone with an iPod, an Internet browser, and email capabilities. As such, in the short run it seemed that demand for the product would be inelastic, with no real existing competition. The recommend pri- cing strategy in such a situation would be: PTS: 1 REF: 306 OBJ: 19-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing
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