Lights Manufacturing Produces a Single Product That Sells for $130

question 140

Multiple Choice

Lights Manufacturing produces a single product that sells for $130. Variable costs per unit equal $55. The company expects total fixed costs to be $100,000 for the next month at the projected sales level of 1,300 units. What is the current breakeven point in terms of number of units?

• A) 770 units
• B) 1,819 units
• C) 541 units
• D) 1,334 units

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for more accurate comparisons and planning.

Supplies Cost

The cost associated with purchasing supplies necessary for the daily operations of a business.

Flexible Budget

A budget that is flexible and adjusts according to activity level or volume changes.

Materials Price Variances

The difference between the actual cost of materials and the standard cost, multiplied by the quantity purchased.