The Elements of Cost Volume Profit

question 13

Essay

The Elements of Cost Volume Profit
The M Company's variable costs are 75% of the sales price per unit and their fixed costs are $240,000.If the company earned $60,000 in selling 150,000 units,what was the sales price per unit?

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short period.

Space Rental

The act of obtaining the use of a physical location or property for a specified period of time in exchange for payment.

Raw Material Cost

The expenditure incurred for the raw ingredients or basic materials that are converted through manufacturing processes into goods or services.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.