A baker buys an oven for his new bakery at the cost of $6,000 to bake bread. Each bread loaf is
baked at the cost of $3, which includes the costs of electricity, dough, packaging, etc. The baker
sells each loaf of bread for $6.
At what point (in terms of sales) does he expect to break even?
A) 1,500 loaves B) 1,000 loaves C) 500 loaves D) 2,000 loaves
D
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Sarduchi Imports owes Radnor S&L $50 million under an 8% note with three years remaining to maturity. Due to financial difficulties of Sarduchi, the previous year's interest ($4 million) was not received. Radnor believes that the present value of all amounts it eventually will collect from Sarduchi is $25 million.Required: Compute the credit loss that the bank would record, and prepare a journal entry to record the credit loss as bad debt expense.
a. $9 million b. $13 million c. $29 million d. $41 million e. None of the above
Nordstrom department stores, which are well known for exceptional customer service, uses:
A) an elaborate system to provide employees answers on how to handle any customer situation. B) a single 5 x 8" card containing 75 words as its guide to employee behavior. C) a well-detailed employee handbook. D) a simple phrase, "treat the customer like a king" as its major guideline.