A Company Has Fixed Costs of $35,000 and Has Average

question 155

Multiple Choice

A company has fixed costs of $35,000 and has average variable costs of $7 per item. This company sells 10,000 units and just breaks even. What is the unit selling price for the product?

• A) $7.35
• B) $10.00
• C) $10.50
• D) $16.00

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Definitions:

Machinery

Equipment or devices designed for a specific purpose, often used in manufacturing or industrial processes.

Investing Activities

Transactions and events that relate to the investment of the company’s cash, including acquisitions and disposals of long-term assets and other investments not included in cash equivalents.

Cash Flows

The net amount of cash being transferred into and out of a business.

Operating Activities

The principal revenue-producing activities of the entity and other activities that are not investing or financing activities.