If Total Fixed Costs Are $10,000, Variable Costs Per Unit

question 19

Multiple Choice

If total fixed costs are $10,000, variable costs per unit are $5, and the price per unit is $15, what is the breakeven quantity?

• A) 500
• B) 667
• C) 1,000
• D) 2,000
• E) 5,000

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Definitions:

Inventory Management

The overseeing and controlling of the ordering, storage, and use of components that a company will use in the production of the items it will sell as well as the managing of quantities of finished products for sale.

Retail Method

An inventory valuation method used in retail, estimating inventory value by applying a fixed percentage to the retail price of the inventory.

Estimating Inventory

A method used to approximate the value or quantity of inventory that a business has on hand at a certain point in time, often using historical data or statistical models.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.