Lever Products (LP)is Considering the Elimination of a Press Machine

question 46

Multiple Choice

Lever Products (LP) is considering the elimination of a press machine.The new press machine should reduce depreciation expenses by $80,000 annually.If LP's total fixed costs were $420,000 last year,what would LP's new break-even point in units if the contribution margin is 3.75 per unit?

• A) 68,000 units
• B) 90,667 units
• C) 100,800 units
• D) 50,667 units

---

Definitions:

IFRS

International Financial Reporting Standards, a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements.

GAAP

Generally Accepted Accounting Principles, a set of rules encompassing the details, complexities, and legalities of business and corporate accounting.

U.S. Standards

This can refer to various official norms and regulations established by organizations and government agencies in the United States spanning different industries and areas such as accounting, safety, and quality.

GAAP

Generally Accepted Accounting Principles; these are the standard set of accounting rules, standards, and procedures that companies use to compile their financial statements in the United States.