Kesterson Corporation Has Provided the Following Information: If 6,000

question 12

Multiple Choice

Kesterson Corporation has provided the following information: If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

• A) $55,800
• B) $63,900
• C) $80,700
• D) $64,800

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Definitions:

Break-even Point

The quantity of sales at which total revenues equal total costs, resulting in no net profit or loss.

Cost-volume-profit Chart

A graphical representation that shows the relationship between a company's costs, sales volume, and profit.

Operating Leverage

A financial ratio that measures the proportion of fixed costs to variable costs in a company's cost structure, indicating how a change in sales volume can impact profits.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.