Ferguson Co At the Breakeven Point, What Is the Dollar Sales Volume

question 61

Multiple Choice

Ferguson Co. incurs $568,000 in fixed costs while producing three products with the following characteristics: $\begin{array}{llll}& \text { Sales Mix } & \text { Unit Contribution } & \text { Contribution } \\\text { Product } & \text { (Units) } & \text { Margin } & \text { Margin Ratio }\\\mathrm{T} & 5 & \$ 900 & 45 \% \\\mathrm{Q} & 3 & 600 & 40 \% \\\mathrm{R} & 2 & 400 & 35 \%\end{array}$ At the breakeven point, what is the dollar sales volume for Product Q?

• A) $800,000
• B) $360,000
• C) $288,000
• D) $120,000

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Definitions:

Comparative Advantage

The ability to make something at a lower opportunity cost than other producers face.

Absolute Advantage

The ability to make something using fewer resources than other producers use.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, leading to more efficient production and trade.

Absolute Advantage

The capability of a country, individual, or company to produce a greater quantity of a good or service with the same amount of resources as another entity.