A Company Is Considering a Project with a Cash Break-Even

question 402

Multiple Choice

A company is considering a project with a cash break-even point of 14,500 units. The selling price is $14 a unit and the variable cost per unit is $8. What is the projected amount of fixed costs?

• A) $87,000
• B) $94,000
• C) $109,000
• D) $116,000
• E) $203,000

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Definitions:

Budgeted Unit Sales

The projected quantity of units that a company plans to sell in a specified budget period, often used for financial planning and forecasting.

Accounts Receivable

Represents money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Budgeted Sales Data

Projections or estimates of the sales revenue expected to be achieved in a future period.

Cash Receipts

The collection of money, typically in the form of cash, checks, or electronic transfers, for goods or services received.