Wardley Corporation Sells Its Product for $40

question 96

Multiple Choice

Wardley Corporation sells its product for $40.The variable costs are $18 per unit.Fixed costs are $16,000.The company is considering the purchase of an automated machine that will result in a $2 reduction in unit variable costs and an increase of $5,000 in fixed costs.Which of the following is true about the break-even point in units?

• A)It will remain unchanged.
• B)It will decrease.
• C)It will increase.
• D)It cannot be determined from the information provided.

Apply budgeting concepts to calculate required production quantities based on sales forecasts and inventory requirements.

Calculate direct labor costs and raw material purchases as part of the budgeting process.

Recognize the sequence and interconnections between different components of the master budget.

Utilize budgeting data to inform financial decision-making and planning.

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Definitions:

Negatively Skewed

Describes a distribution of data where the tail on the left side of the distribution is longer or fatter, indicating that the bulk of the values are concentrated on the right.

Proportion

A statistical measure indicating the fraction of a whole that is made up by a certain characteristic or subset.

Negatively Skewed

Refers to a distribution or data set where the tail is longer on the left side of the distribution's peak, indicating that the mass of the distribution is concentrated on the right.

Histogram

A graphical representation of the distribution of numerical data, using bars of different heights.