If Fixed Costs Are $450,000,the Unit Selling Price Is $75,and

question 246

Multiple Choice

If fixed costs are $450,000,the unit selling price is $75,and the unit variable costs are $50,what are the old and new break-even sales (units) if the unit selling price increases by $10?

• A) 6,000 units and 5,294 units
• B) 18,000 units and 6,000 units
• C) 18,000 units and 12,857 units
• D) 9,000 units and 15,000 units

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Definitions:

Initial Cost

The amount of money spent to acquire or start up an asset or investment, excluding any subsequent costs for maintenance or operation.

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since the asset was acquired and made available for use.

Machinery

Heavy industrial equipment used in the production of goods or for performing services, which can include machines for manufacturing, assembly, and packaging.

Fixed Asset Turnover Ratio

The number of sales dollars earned per dollar of fixed assets, computed by dividing sales by the average book value of fixed assets.