New Products Currently Sells a Product with a Variable Cost

question 17

Multiple Choice

New Products currently sells a product with a variable cost per unit of $23 and a unit selling price of $49. At the present time, the firm only sells on a cash basis with monthly sales of 733 units. The monthly interest rate is .48 percent. What is the value of Q' at the switch break-even point if the firm adopted a net 30 credit policy? Assume the selling price per unit and the variable costs per unit remain constant.

• A) 739.66 units
• B) 736.34 units
• C) 728.47 units
• D) 740.29 units
• E) 743.18 units

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