Computing the Breakeven Quantity Level

# 1. With the given information down below on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? Orders must be placed in blocks of 100 bags. Please select the right choice below, Choose the best answer:

A. Use the profit maximizing rule, MR ≥ MC, buy 300 bags.

B. Use profit maximizing rule, MR ≥ MC, buy 200 bags.

C. Use Qb = F/(MR-MC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300.

D. Use Qb = F/ (MR – MC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.

# 1. Complete the table below for the parcels market:

Bags Fixed Cost Variable Cost Total Cost

0 $1,700 $- 1,700

100 $1,700 $500 $2,200

200 $1,700 $1,200 $2,900

300 $1,700 $2,700 $4,400

400 $1,700 $5,200 $6,900

500 $1,700 $9,000 $10,700

600 $1,700 $15,000 $16,700

700 $1,700 $23,800 $25,500

800 $1,700 $36,800 $38,500

900 $1,700 $55,800 $57,500

1,000 $1,700 $83,00 $84,700