In Keegan Corporation's Most Recent Fiscal Year,the Company Reported Pretax

question 88

Multiple Choice

In Keegan Corporation's most recent fiscal year,the company reported pretax earnings of $215,000.Fixed costs totaled $325,800,the unit selling price of the firm's only product was $60,and the variable costs per unit were 40% of the selling price.Based on this information,the firm's break-even point in units was:

• A)13,575 units.
• B)15,023 units.
• C)13,750 units.
• D)9,050 units.
• E)8,750 units.

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Definitions:

Predetermined Overhead Rate

A predetermined overhead rate is an estimated rate used to assign overhead costs to products or job orders, based on a specific activity base.

Budget Data

Financial plans containing detailed projections of revenues and expenses for a future period, often used for management control and planning.

Factory Overhead

The indirect costs associated with manufacturing, including expenses like utilities and maintenance not directly tied to the production of goods.

Predetermined Factory Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a standard cost system.