Sam Is Offering a New Product Which Has a Variable

question 353

Multiple Choice

Sam is offering a new product which has a variable cost per unit of $26.08 and total fixed costs of $42,714. What is the selling price of this product if the cash break-even quantity is 6,300 units?

• A) $29.47
• B) $29.63
• C) $32.10
• D) $32.86
• E) $33.07

---

Definitions:

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholders' equity.

EPS

Earnings Per Share; an indicator of a company's profitability, calculated as the company's net income divided by the number of its outstanding shares.

Capital Restructuring

Changing a firm’s capital structure intentionally by buying and selling stocks and bonds simultaneously.

Leverage

Leveraging borrowed money to enhance the expected gains from an investment.