ABC, Inc Is Considering a Project with a Discounted Payback Just

question 296

Multiple Choice

ABC, Inc. is considering a project with a discounted payback just equal to the project's life. The projections include a sales price of $13, variable cost per unit of $10.50, and fixed costs of $5,000. The operating cash flow is $6,300. What is the break-even quantity?

• A) 3,869 units
• B) 3,913 units
• C) 4,340 units
• D) 4,520 units
• E) 4,610 units

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Definitions:

Finished Goods Inventory

The stock of completed products that are ready to be sold but are still in the company's inventory.

Selling And Administrative Budget

Forecasts expected expenses related to selling the product and managing the business, excluding manufacturing costs.

Cash Budget

A financial plan that estimates cash inflows and outflows over a particular period, often used to assess whether the entity can maintain its operations and obligations.

Units Produced

The total number of finished products that a company manufactures during a specific period.