If Fixed Costs Are $561,000 and the Unit Contribution Margin

question 9

Multiple Choice

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

• A) 66,000
• B) 70,125
• C) 74,800
• D) 60,000

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Definitions:

Sale-or-return

A commercial arrangement where goods are delivered to a buyer who has the right to return the goods if they are not sold, within a stipulated period.

Voidable Title

A legal condition referring to a situation where a title or ownership can be invalidated at the discretion of one party due to certain conditions, such as fraud.

Void

A term applied to a contract that is not valid because its object is illegal or it has some defect that is so serious that it is not a contract.

CIF

Cost, Insurance, and Freight, a term used in international trade that indicates the seller is responsible for covering these expenses until the goods reach the purchaser's specified port of destination.