The Following Is Last Month's Contribution Format Income Statement What Is the Company's Break-Even Sales in Units?
A)12,000 Units

question 43

Multiple Choice

The following is last month's contribution format income statement: $$\begin{array} { | l | c | } \hline \text { Sales (10,000 units) } & \$ 1,200,000 \\\hline \text { Less variable expenses } & 800,000 \\\hline \text { Contribution margin } & 400,000 \\\hline \text { Less fixed expenses } & 240,000 \\\hline \text { Net income } & \$ 160,000 \\\hline\end{array}$$ What is the company's break-even sales in units?

• A)12,000 units.
• B)6,000 units.
• C)8,000 units.
• D)0 units.

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Definitions:

Acquisition Method

An approach in accounting for business combinations where the acquirer applies the fair value to the identifiable assets and liabilities of the acquired entity.

Issuing Debt

The act of a company borrowing money through the sale of securities like bonds to investors.

Amortized

The gradual reduction of a debt or the cost of an intangible asset over a specific period, typically through regular payments or writedowns.

Voting Rights

The entitlement of shareholders to vote on corporate matters, such as the election of the board of directors, at shareholder meetings.