Kaplan Inc

question 82

Multiple Choice

Kaplan Inc. produces flash drives for computers which it sells for $27 each. The variable cost to make each flash drive is $13. During April 700 drives were sold. Fixed costs for April were $2 per unit for a total of $1400 for the month. How much is the monthly break-even level of sales in dollars for Kaplan?

• A) $100
• B) $2700
• C) $14000
• D) $8400

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Definitions:

Borrowed Money

Funds that an individual or entity obtains from another party under the condition of future repayment with interest, which can be used for various purposes.

Debt Paying Ability

Debt paying ability indicates an entity's capacity to repay its debt obligations based on its financial situation, including liquidity ratios and income.

Acid-test Ratio

A stringent indicator of a company's liquidity, calculating its ability to cover short-term obligations with its most liquid assets, excluding inventory.

Inventory Turnover

A measure of how often a company's inventory is sold and replaced over a certain period of time, indicating efficiency in inventory management.