Smith Company Reported the Following Results from Sales of 5,000

question 53

Multiple Choice

Smith Company reported the following results from sales of 5,000 units of Product A for June: $\begin{array}{ll}\text { Sales } & \$ 200,000 \\\text { Variable costs } & ({120,000}) \\\text { Fixed costs } & (\underline{60,000}) \\\text { Operating income } & \underline{\$ 20,000}\end{array}$ Assume that Smith increases the selling price of Product A by 10 percent in July.How many units of Product A would have to be sold in July to generate an operating income of $20,000?

• A)4,000
• B)4,300
• C)4,545
• D)5,000

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Definitions:

Hostility

An unfriendly or antagonistic attitude or behavior towards others.

Setting Limits

The process of establishing boundaries or rules that dictate acceptable behavior.

Communicating Consequences

The process of informing others about the outcomes or effects that can result from specific actions or behaviors.

Business Units

Individual, operational segments within a company, each responsible for specific business functions or objectives.