Ichi Corp Produces a Single Product and Projects the Following Costs

question 26

Multiple Choice

Ichi Corp. produces a single product and projects the following costs for a normal month in which 50 units are produced and sold: $$\begin{array} { l c c } & \text { Manufacturing } & \text { Nonmanufacturing } \\\cline { 2 - 3 } \text { Fixed costs } & \$ 8,000 & \$ 5,000 \\\text { Total variable costs } & 7,700 & 6,050\end{array}$$ The selling price per unit is $400. What volume, in units, must Ichi sell to break even?

• A) 40
• B) 104
• C) 53
• D) 90

Understand the implications of HRM activities on market value and shareholder interests.

Acknowledge the role of corporate social responsibility and its effects on human resources management.

Realize the significance of cultural values in shaping HR management philosophy.

Define primary and strategic stakeholder groups and their importance for organizational survival.

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Definitions:

Contribution Margin Format

A format of income statement that separates variable costs from fixed costs to calculate contribution margin, which helps in analyzing profitability.

Absorption Costing

A financial accounting approach that encompasses all expenses of manufacturing, like direct materials, direct labor, along with variable and fixed overhead costs, into the pricing of a product.

Product Cost

The total expense incurred to produce a product, including direct materials, direct labor, and overhead costs.

Incremental Loss

The additional loss incurred from producing one extra unit of a product or service beyond the break-even point.