A Company Faces Fixed Costs of $100,000 and Variable Costs

question 128

Multiple Choice

A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

• A) 20,000
• B) 25,000
• C) 30,000
• D) 35,000
• E) 40,000

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Definitions:

Market Price

The immediate cost at which one can buy or sell a service or asset in the marketplace.

Semiannually

Occurring twice a year, commonly used in the context of interest payment schedules or bond coupon payments.

Yield To Maturity

The expected total yield on a bond if it is retained until its maturity date.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value, determining the interest payments to bondholders.