Dane Company Has a Break-Even Point of 120,000 Units

question 76

Multiple Choice

Dane Company has a break-even point of 120,000 units. If the firm's sole product sells for $40 and fixed costs total $480,000, the variable cost per unit must be:

• A) $4.
• B) $36.
• C) $44.
• D) an amount that cannot be derived based on the information presented.
• E) an amount other than $4, $36, or $44, but one that can be derived based on the information presented.

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Definitions:

Accounts Payable Balance

The total amount of money a company owes to its suppliers or creditors at a given point in time.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the material and labor costs.

Prior Quarter Sales

The total revenue generated by a business in the quarter immediately preceding the current one.

Accounts Payable

The amount of short-term debts or obligations a company owes to its suppliers or creditors.