BASIC INFORMATION: a Three-Year Project Will Cost $60,000 to Construct

question 324

Multiple Choice

BASIC INFORMATION: A three-year project will cost $60,000 to construct. This will be depreciated straight-line to zero over the three-year life. The price per unit sold is $20 and the variable cost per unit sold is $10. Fixed costs are $30,000 per year.

Using the BASIC INFORMATION, compute the cash break-even point. (Ignore taxes.)

• A) 1,800
• B) 3,000
• C) 4,200
• D) 5,000
• E) 7,000

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Definitions:

Basic Assumptions

Fundamental beliefs or principles that are accepted as true without proof and form the basis for reasoning or behavior.

Dispositional

pertaining to stable characteristics or traits of an individual that influence their behaviors and attitudes.

Kelley's Attribution Theory

A framework suggesting that people interpret their own and others' behaviors by attributing them to either internal dispositions or external situations.

Best Fit Explanation

A theory or hypothesis that most accurately accounts for the evidence or data among competing options.