Hug Me Company Produces Dolls

question 16

Multiple Choice

Hug Me Company produces dolls.Each doll sells for $20.00.Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor.If the break-even volume in dollars is $1,446,000, then the total fixed costs for the period must be _____.

• A)$433,800
• B)$361,500
• C)$516,425
• D)$1,446,000

---

Definitions:

Investments-Treasury Bonds

Fixed-income securities issued by a government to finance its expenditures, considered safe investments with a fixed interest rate.

Interest to Creditors

The amount paid to creditors for lending money or extending credit, typically represented as an annual percentage of the principal.

Current Expenses

Short-term expenses that are incurred in the normal operations of a business and are expected to be paid within a fiscal year.

Dividends to Stockholders

Payments made by a corporation to its shareholder members, usually deriving from the company's earnings.