Marketing Chapter 13 Part II
_________________ cost is the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. (one word)
Variable
An example of a variable cost is ______.
direct labor used to manufacture the product
Executive salaries are a good example of a(n) ________ cost.
fixed
For a firm, rent and insurance are examples of ______ costs.
fixed
Break-even analysis can help evaluate the impact of changes in _______ and _______ on ________.
price; costs; profit
Fixed costs ______.
remain at the same level despite changes in production
The intersection of the total revenue curve with the total cost curve on a graph of revenue/costs versus quantity is called ______.
the break-even point
At the break-even point, profit is ______.
zero
Variable costs _____ production volume.
change with
If you sell televisions for $250 each, and you have fixed costs of $60,000 and unit variable costs of $50, what is your break-even point?
300 units
The __________-__________ point is the quantity at which total revenue and total cost are equal. (one word each blank)
Blank 1: break Blank 2: even
_________________ cost is the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. (one word)
Fixed
You sell picture frames at your business, and because they're flying off the shelves you decide to give your salaried managers a 5% raise. What does this do to your break-even point?
Fixed costs increase, so the break-even point does as well.
The demand curve is ______.
a graph relating quantity sold and price
The point at which the number of units sold generates enough revenue to equal total costs is known as ______.
break-even point
When a firm sells more product than is necessary to cover its total costs, it will ______.
make a profit
On a demand curve, one of the axes represents the price of a product while the other represents the ______.
maximum units sold
The unit variable cost is usually expressed _______.
on a per unit basis
The unit variable cost is ______.
the total variable cost divided by the quantity
The sum of fixed and variable costs is known as ______.
total cost
Break-even analysis analyzes the relationship between which two at various levels of output?
total revenue total cost
A break-even analysis chart shows the intersection of which two curves?
total revenue total costs
Direct labor and materials are considered to be ______ costs.
variable
Total cost represents _____
variable costs plus fixed costs
