Compute the Number of Units That Must Be Sold in Order

question 39

Multiple Choice

Compute the number of units that must be sold in order to have zero profit when fixed costs are $810,000 and unit contribution margin is $90.

• A) 8,100 units
• B) 9,000 units
• C) 6,500 units
• D) 6,810 units

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Definitions:

Process Cost Summary

A report detailing the total costs associated with the production process, including materials, labor, and overhead expenses, over a specific period.

Equivalent Units

A concept used in cost accounting to indicate a quantity of finished goods that could have been produced given the amount of resources actually consumed during a period.

Managerial Accounting

The process of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the pursuit of an organization's goals.

Weighted Average Method

A costing method used to determine the average cost of inventory by weighting the cost of goods available for sale by the total units available.