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Break even analysis

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A friend of yours is trying to determine whether to open a sandwich stand at the local mall based on the following data. She expects total fixed costs per year of $24,000, a sale price per sandwich of $3.00, and variable costs per sandwich of $1.80.

The break-even level of output for this endeavor is:
a. 12,000.
b. 16,000.
c. 20,000.
d. 24,000.

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The expert examines the break-even analysis.

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Your fixed costs are $24,000. When we say 'fixed', this means that the amount will not change regardless of how much or how little business is conducted.

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