Gabe Industries Sells Two Products,Basic Models and Deluxe Models

question 174

Multiple Choice

Gabe Industries sells two products,Basic models and Deluxe models.Basic models sell for $42 per unit with variable costs of $30 per unit.Deluxe models sell for $50 per unit with variable costs of $40 per unit.Total fixed costs for the company are $75,400.Gabe Industries typically sells four Basic models for every Deluxe model.What is the breakeven point in total units?

• A)6,500 units
• B)3,900 units
• C)9,921 units
• D)5,953 units

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Definitions:

Unrealized Gains

Increases in the value of assets that have not yet been sold and therefore not converted into cash.

Fair Value

An estimate of the market value of an asset or liability, based on the current price at which it can be sold or settled.

Health Care Entities

Entities engaged in delivering health care services, producing medical devices or medications, offering medical insurance, or otherwise supporting the delivery of health care to individuals.

Uncollectible Amount

Money owed to a company that it is unable to recover, often recognized as an expense.