Flesch Corporation Produces and Sells Two Products

question 340

Multiple Choice

Flesch Corporation produces and sells two products. In the most recent month, Product C90B had sales of $24,000 and variable expenses of $6,480. Product Y45E had sales of $29,000 and variable expenses of $11,010. The fixed expenses of the entire company were $32,280. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:

• A) would decrease.
• B) would increase.
• C) could increase or decrease.
• D) would not change.

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Definitions:

Legal Owner

A legal owner is the individual or entity that holds legal title to property, having the right to control and dispose of it under the law.

Working Papers

The various documents used and developed during an audit, including notes, calculations, copies, memorandums, and other papers constituting the accountant’s work product.

Total Mix Standard

A principle suggesting that information should be judged in its entirety, considering all contributions to the overall understanding or decision.

Scienter

A legal term denoting knowledge on the part of a person who commits a wrongful act, especially in securities law, where it involves knowledge of the act's deceitful or fraudulent nature.