Bus_401_finance

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1. Amish Enterprises makes wooden play sets. The company pays annual rent of $350,000 per year and pays administrative salaries totaling $120,000 per year. Each play set requires $300 of wood, ten hours of labor at $50 per hour, and variable overhead costs of $50. Fixed advertising expenses equal $40,000 per year. Each play set sells for $ 2,350. What is Amish Enterprises' break even output level? (Points :1)

340 play sets

217 play sets

159 play sets

270 play sets

2. A plant may remain operating when sales are depressed _________ (Points :1)

If the selling price per unit exceeds the variable cost per unit

To help the local economy

In an effort to cover at least some of the variable cost

Unless variable costs are zero when production is zero

3. A firm that uses large amounts of debt financing in an industry characterized by a high degree of business risk would have ______ earnings per share fluctuations resulting from changes in levels of sales. (Points :1)

No

Constant

Large

Small...