Reference: 08-11
Hurst Co -In the Current Year, the Company Sold 43,000 Units

question 105

Multiple Choice

Reference: 08-11
Hurst Co. manufactures and sells a single product. Price and cost data regarding this product are as follows: $$\begin{array} { | l | l | } \hline \text { Selling price } & \$ 40 \text { per unit } \\\hline \text { Variable manufacturing costs } & \$ 20 \text { per unit } \\\hline \text { Variable selling \& admin. expenses } & \$ 6 \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 208,000 \text { per year } \\\hline \text { Fixed selling \& admin. expenses } & \$ 324,000 \text { per year } \\\hline\end{array}$$
-In the current year, the company sold 43,000 units. Due to competition, management will be forced to lower the selling price by 10% next year. How many units must be sold next year to earn the same income as was earned in the current year?

• A)58,800 units.
• B)60,200 units.
• C)53,200 units.
• D)50,000 units.

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Definitions:

Business Etiquette

The set of expected behaviors and manners that are considered professional and polite in a business environment.

Mutual Respect

A foundational element in relationships and interactions, where each party acknowledges and honors the dignity and rights of the other.

Consideration

The process of thinking carefully about something, often before making a decision.

Nonverbal Communication Cues

Signals or signs used to convey messages without words, such as gestures, facial expressions, and body language.