Kid's Corner Sells Lamp Systems for $25

question 113

Essay

Kid's Corner sells lamp systems for $25.These systems use LEDs to create a light display across walls or ceilings.Kid's Corner pays $13 for the systems.Fixed costs incurred by the company are $18,000.
a.What is the breakeven point in units?
b.If Kid's Corner wishes to earn $10,000 in operating income, how many systems will it have to sell?

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Definitions:

Freight Costs

Expenses incurred by a company to transport goods from one location to another, often included in the cost of sales or inventory.

Selling Expense

Costs incurred directly in the sale of a product or service, including advertising, sales commissions, and store upkeep.

Merchandise Sold

The total goods that have been sold by a company, typically within a specific period, contributing to its revenue.

Discount Period

The discount period is the timeframe during which a discount is offered for early payment on goods or services, often used to incentivize quicker payment by customers.