Maggie Corp

question 3

Multiple Choice

Maggie Corp.has a selling price of $20 per unit,variable costs of $10 per unit,and fixed costs of $140,000.How many units must be sold to break even?

• A)7,000
• B)14,000
• C)3,500
• D)2,334

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Definitions:

Fixed Overhead

The portion of a company's fixed costs that are not directly tied to production levels, such as rent and insurance.

LIFO Reserve

The difference between the cost of inventory calculated under the Last-In, First-Out method and the FIFO method.

LIFO

Last-In, First-Out, an inventory management method where the most recently produced or acquired items are sold first.

FIFO

An inventory valuation method that assumes the first items placed in inventory are the first sold, standing for 'First In, First Out'.