Lindsay Company Reported the Following Results from Sales of 5,000

question 128

Multiple Choice

Lindsay Company reported the following results from sales of 5,000 units for the month o? June: $$\begin{array} { | l | l | } \hline \text { Sales } & \$ 200,000 \\\hline \text { Variable expenses } & 120,000 \\\hline \text { Fixed expenses } & 60,000 \\\hline\end{array}$$ Assume that Lindsay increases the selling price of the product by 10% on July 1. How many units would have to be sold in July in order to generate a profit of $20,000?

• A)5,000 units.
• B)4,500 units.
• C)4,300 units.
• D)4,000 units.

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Definitions:

Trading Costs

Trading costs are the expenses incurred in buying and selling financial instruments, including commissions, spreads, and slippage.

Lockbox System

A service provided by banks to companies for the collection of payments from customers, where the payments are sent directly to a post office box to expedite processing.

Treasury Bills

Treasury bills are short-term government securities with maturities ranging from a few days to 52 weeks, sold at a discount from their face value.

Collection Time

The average period it takes for a company to receive payments owed by its customers after a sale has been made.