Fixed Costs Are $900000 and the Variable Costs Are 75

question 88

Multiple Choice

Fixed costs are $900000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars?

• A) $2100000
• B) $2700000
• C) $3600000
• D) $1200000

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Definitions:

Actual Manufacturing Overhead

The actual indirect costs incurred in the production process, including utilities, depreciation, and maintenance of production facilities.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of a product, including indirect materials, indirect labor, and other indirect costs.

Finished Goods Inventory

The products that have completed the manufacturing process, ready to be sold to customers.

Overapplied

Refers to a situation in managerial accounting where the applied overhead is more than the actual overhead incurred.