Figure 11-7 -Suppose You Are the Owner of a Picture Frame Store

Multiple Choice

Figure 11-7
-Suppose you are the owner of a picture frame store. Assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting) . According to Figure 11-7a above, how much profit will your picture frame store make if it sells 400 picture frames?

A) $48,000
B) $32,000
C) $16,000
D) $0
E) $64,000