Tucker's Trucking Is Considering a Project with a Discounted Payback

question 24

Multiple Choice

Tucker's Trucking is considering a project with a discounted payback period just equal to the project's life. The projections include a sales price of $39, variable costs per unit of $14, and fixed costs of $238,000. The operating cash flow is $24,300. What is the break-even quantity?

• A) 9,363 units
• B) 11,211 units
• C) 11,482 units
• D) 12,301 units
• E) 10,492 units

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Definitions:

FICA

The Federal Insurance Contributions Act, a U.S. law that mandates a payroll tax on both employees and employers to fund Social Security and Medicare.

Monthly Wage Base

The total amount of money earned by an employee in a month before deductions.

Collective Bargaining Agreement

A contract negotiated by an employer and a labor union that covers all issues related to employment.

OSHA

The Occupational Safety and Health Administration, a U.S. government agency responsible for ensuring safe and healthy working conditions.