The Mini-Max Company Has the Following Cost Information on Their

question 11

Multiple Choice

The Mini-Max Company has the following cost information on their new prospective project. Fixed costs are $200/year. (Initial investment is $700) .
Variable costs: $3/unit.
Depreciation: $140/year.
Price: $8/unit.
Discount rate: 12%.
Project life: 5 years.
Tax rate: 34%.
Calculate the accounting break-even point.

• A) 68.00 units/year.
• B) 103.03 units/year.
• C) 113.33 units/year.
• D) 25.00 units/year.

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Definitions:

Perpetual Inventory System

An inventory tracking system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Debit Memo

A document issued to record a reduction in the balance due from a customer, often due to a return or correction.

Gross Profit

The difference between revenue and the cost of goods sold before expenses.

Single-Step Income Statement

An income statement format that calculates net income using a single subtraction of total expenses from total revenue.