Fantasmas Incorporated Had the Following Information How Many Units Need to Be Sold to Produce a }

question 29

Multiple Choice

Fantasmas Incorporated had the following information: $\begin{array}{lrr}\text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \\\text { Units sold } & \$ 20&-- \\\text { Setups } & 1,200 &60\\\text { Engineering hours } & 52&1,500\\\\\text { Other data: }\\\text { Total fixed costs (traditional) } & \$ 600,000 \\\text { Total fixed costs }(A B C) & \$ 360,000 \\\text { Unit selling price } & \$60\end{array}$
How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

• A)8,350 units
• B)12,800 units
• C)15,580 units
• D)14,750 units

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Definitions:

Compounding Period

The period of time after which interest is credited to the depositor’s account for purposes of computing subsequent interest.

Interest Rate

The percentage charged on a loan or paid on savings over a specific period, usually expressed as an annual percentage of the principal.

Invested Today

The action of allocating resources, usually money, in the present with the expectation of receiving a future return.

Equal Payments

Regular payments of the same amount over time, commonly associated with loans or annuities.