Max Company's Break-Even Point Is 2,000 Units, Its Contribution Margin

question 43

True/False

Max Company's break-even point is 2,000 units, its contribution margin per unit is $2, and its selling price per unit is $12.If the company sell 10 more units, its net income will be $4,000.

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Definitions:

Service Companies

Organizations that provide intangible products to their customers, usually offering professional advice or services rather than physical products.

Activity Levels

Refers to the volume of work or operations within a specific time frame in a business, affecting cost behavior and operational efficiency.

Goal Conflict

A situation where different parties have goals that are not aligned, leading to potential conflict or inefficiency.

Budgetary Slack

The intentional underestimation of revenues and/or overestimation of expenses in a budget to create the appearance of having less money available than might actually be available.