On-The-Go Merchandiser sells luxury carry-on travel bags for $1,200 each. The firm's fixed operating costs are $600,000 when 5,000 or fewer bags are produced, and its variable cost ratio is 80 percent (i.e., variable cost per unit is 80 percent of the selling price). What is On-The-Go's operating breakeven point?
A. 500 bags
B. 6,000 bags
C. 750 bags
D. 2,500 bags
E. 4,000 bags
Answer: D
Mathematics
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