If Fixed Costs Are $450,000, the Unit Selling Price Is

question 40

Multiple Choice

If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, the old and new break-even sales (units) , respectively, if the unit selling price increases by $10 are

• A)6,000 units and 5,294 units
• B)18,000 units and 6,000 units
• C)18,000 units and 12,857 units
• D)9,000 units and 15,000 units

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Definitions:

Credit Sales

Sales made by a business allowing the customer to pay at a later date, often tracked through accounts receivable.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Short-Term Note Payable

A debt obligation due within one year or within the normal operating cycle of the business, used to finance short-term financing needs.

Receivables Turnover Ratio

A financial metric used to assess how efficiently a company collects cash from its credit sales by dividing total credit sales by the average accounts receivable.