If the Selling Price Is Reduced by 5%,variable Expenses Reduced

question 153

Multiple Choice

If the selling price is reduced by 5%,variable expenses reduced by $1.00,and fixed expenses increased to a total of $38,400,how many units would need to be sold to earn a net income of $21,000?

• A) 1,000 units.
• B) 1,700 units.
• C) 2,700 units.
• D) 2,950 units.

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Definitions:

Intangible Asset

An asset that lacks physical substance and represents potential future benefits; examples include patents, trademarks, and goodwill.

Defined Benefit Pension Plan

A type of pension plan where the benefits that the retiree will receive are defined based on factors such as salary history and duration of employment.

Interest Cost Component

The portion of pension expense that reflects the increase in pension benefits liability due to the passage of time, calculated based on actuarial assumptions.

Unrecognized Net Loss

A financial loss that has occurred but has not yet been reported in the company's financial statements.