A Producer with Only One Product Has Total Fixed Costs

question 127

Multiple Choice

A producer with only one product has total fixed costs of $15,000 per month.In addition,it cost the producer $100 in variable costs to produce each unit of her product (raw materials and direct labor cost) .The producer charges her wholesalers $125 per unit.How many units of the product does the producer have to sell each month in order to break even?

• A)450 units
• B)500 units
• C)550 units
• D)600 units
• E)650 units

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health.

Financial Data

Financial data encompasses quantitative information about a business's financial position, performance, and cash flows, typically found in financial statements.

Sales On Account

Transactions where revenue is recorded when a sale is made but the cash is collected at a later date.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by dividing current assets by current liabilities.