Sanchez & Ryan, Inc, Sells a Single Product

question 101

Multiple Choice

Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs.
-The number of units that must be sold annually to achieve $52,500 of profits is:

• A)20,000 units.
• B)15,000 units.
• C)10,000 units.
• D)5,000 units.

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Definitions:

Physical Flow

The tracking of physical units as they move through the production process.

Specific Identification

A method in inventory accounting that tracks the actual cost of specific items sold and in inventory.

Net Income Manipulation

The practice of altering financial statements to present a more favorable picture of a company's profits.

Average Cost Formula

A method used to calculate the cost of goods sold and ending inventory by taking the total cost of goods available for sale and dividing it by the total number of units available for sale.