The Fixed Cost of Allied Breads, a Bread Baking Company

Multiple Choice

The fixed cost of Allied Breads, a bread baking company, is $200,000 per year. The cost of equipment and labor to make one packet of bread is $3. If the breakeven point of the company is 100,000 packets of bread, Widget Corp. needs to sell its bread packets at a price of _____ per packet to make profits.

A) at least $7
B) at least $6
C) less than $4
D) more than $5