Harry Sprague Makes Custom Bowling Balls

question 44

Multiple Choice

Harry Sprague makes custom bowling balls.His fixed cost is $255,000, variable cost is $45.50, and selling price is $55.50.To what value must he reduce his variable cost if he wants a break-even point of 10,000 units?

• A)$39
• B)$37
• C)$35
• D)$30

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Definitions:

First-In, First-Out

First-In, First-Out (FIFO) is an inventory valuation method where the earliest items purchased or produced are the first sold, affecting the cost of goods sold and inventory value.

Cost Of Production Report

A document summarizing the total cost of materials, labor, and overhead incurred in producing a product or service.

Department A

Department A is a placeholder name commonly used to represent a specific unit or section within a larger organization, focusing on a distinct set of tasks or functions.

Conversion Costs

Costs incurred to convert raw materials into finished products, typically including direct labor and manufacturing overhead.