The Wiltmore Co

question 116

Multiple Choice

The Wiltmore Co. would like to add a new product to complete their lineup. They want to know how many units they must sell to limit their potential loss to their initial investment. What is this quantity if their fixed costs are $12,000, the depreciation expense is $2,500, and the contribution margin is $1.30? (Round to whole units)

• A) 9,231 units
• B) 9,903 units
• C) 10,002 units
• D) 10,629 units
• E) 11,154 units

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Definitions:

Probability Of Default

The likelihood that a borrower will be unable to meet its debt obligations.

EOQ

Economic Order Quantity, a formula used to determine the ideal quantity of inventory to minimize total costs related to ordering, receiving, and holding inventory.

Carrying Cost

The total cost of holding inventory, including storage, insurance, taxes, depreciation, and obsolescence, which affects a company's overall profitability.

One-Shot Approach

A method or strategy applied only once, typically without the intention of repetition or long-term implementation.