Zachary Company Produces and Sells a Product That Has Variable

question 44

Multiple Choice

Zachary Company produces and sells a product that has variable costs of $7 per unit and fixed costs of $200,000 per year._____ is the cost per unit if 40,000 units per year are produced and sold.

• A)$7
• B)$17
• C)$10
• D)$12

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), which represents the profit a company earns from its core operations.

Fixed Costs

Overhead expenses that remain constant regardless of the volume of activity or production levels within a company.

Cost-volume-profit Analysis

An accounting tool used to determine the effects of changes in costs and volume on a company's profits.

Equation Form

A mathematical representation expressed through an equation, often used in describing financial principles or calculations.