Figure 8-4 Dirth Company Sells Only One Product at a Regular Price

question 45

Multiple Choice

Figure 8-4
Dirth Company sells only one product at a regular price of £7.50 per unit. Variable expenses are 60 per cent of sales and fixed expenses are £30,000. Management has decided to decrease the selling price to £6.00 in hopes of increasing its volume of sales.
-Refer to Figure 8-4. What sales pound level is needed to obtain a before-tax profit of £60,000 when the selling price is £6.00 per unit?

• A)£360,000
• B)£120,000
• C)£72,000
• D)£90,000

Grasp the concept of a lean business model and its goals, including waste elimination.

Understand the significance and procedures related to ethical conflict resolution in the accounting profession.

Identify the characteristics of fixed and variable costs, and direct and indirect costs.

Understand the flexibility and adaptability required in managerial accounting practices.

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Definitions:

Supply Determined

A scenario where the quantity of goods available in the market is primarily dictated by the supply side, rather than consumer demand.

Spruce Goose

The nickname for the Hughes H-4 Hercules, famously known as the largest wooden airplane ever constructed and flown only once.

Fixed in Supply

Pertains to goods or resources that have a limited or unchangeable quantity available, regardless of demand.

High-Speed Rail

A type of rail transport that operates significantly faster than traditional rail traffic, using specialized rolling stock and dedicated tracks.