Reynold's Grocery Has Fixed Costs of $350,000, the Unit Selling

question 127

Multiple Choice

Reynold's Grocery has fixed costs of $350,000, the unit selling price is $29, and the unit variable costs are $20. What are the break-even sales in units (rounded to a whole number) if the variable costs are decreased by $4?

• A) 26,923 units
• B) 12,069 units
• C) 21,875 units
• D) 38,889 units

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Definitions:

Prospect Theory

A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are unknown.

Behavioral Economists

Scholars examining how psychological, cognitive, emotional, cultural, and social influences affect the financial choices of individuals and organizations.

Gains

Increases in economic benefits, such as profits, revenue, or utility.

Losses

Negative financial results from business operations, where expenses exceed revenues.