Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labour, materials, and promotional costs. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labour, materials, and promotional costs. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labour, materials, and promotional costs. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?



A.

10 clocks


B.

100 clocks


C.

1,000 clocks


D.

10,000 clocks



Answer: C


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