Evergreen Corporation Manufactures Circuit Boards and Is in the Process

question 25

Multiple Choice

Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below.
$\begin{array}{lr}\text {Sales}&&\$3,500,000\\\text {Cost of sales:}\\\text { Direct Material } & \$ 500,000 \\\text { Direct labor } & 250,000 \\\text { Variable Overhead } & 275,000 \\\text { Fixed Overhead } & 600,000&1,625,000\\\text { Gross Profit}&&\$1,875,000\\\text { Selling and General \& Admin. Exp.}\\\text { Variable}&750,000 \\\text { Fixed}&250,000&1,000,000\\\text { Operating Income }&&\$875,000\end{array}$
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The break-even point (rounded to the nearest dollar) for Evergreen Corporation for the current year is:

• A) $2,625,000.
• B) $1,865,672.
• C) $1,724,138.
• D) $2,155,172.

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Definitions:

CPU's

Stands for Central Processing Units, which are the primary components of computers responsible for interpreting and executing most of the commands from the computer's other hardware and software.

Kernel Speed

Refers to the efficiency or performance rate at which the core of a computer's operating system processes data or tasks.

Gigahertz (GHz)

A unit of frequency equal to one billion cycles per second, commonly used to measure the clock speed of computer processors.

Nonvolatile Storage

A type of storage that retains data even when power is turned off, such as hard drives, flash drives, and SSDs.