Payton Industries Has Fixed Costs of $490,000, the Unit Selling

question 34

Multiple Choice

Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20.What is the break-even sale units if fixed costs are reduced by $40,000?

• A)32,667 units
• B)14,000 units
• C)30,000 units
• D)24,500 units

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Definitions:

Income Statement

A financial statement that shows a company's revenue and expenses over a specific time period, concluding with the net profit or loss.

Operating Activities

Business activities related to daily operations, such as selling goods and services, which affect the cash flow of a company.

Cash Inflow

The receipt of cash or cash equivalents into a business from various sources, such as sales, financing, or investments.

Indirect Method

A cash flow statement preparation method that adjusts net income for non-cash transactions and changes in working capital to calculate cash flow from operating activities.