Kelvin Co Produces and Sells Socks

question 66

Multiple Choice

Kelvin Co. produces and sells socks. Variable costs are budgeted at $4 per pair, and fixed costs for the year are expected to total $90,000. The selling price is expected to be $6 per pair.
The sales units required for Kelvin Co. to make a before-tax profit (πB) of $12,000 are:

• A) 46,000 units.
• B) 51,500 units.
• C) 50,000 units.
• D) 51,000 units.
• E) 52,000 units.

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Definitions:

Beginning Inventory

The value of goods available for sale or use at the start of an accounting period, carried over from the end of the previous period.

Budgets

Financial plans that estimate revenue and expenditures over a specific time period.

Potential Bottlenecks

Points in the production process that can cause delays due to limited capacity or resources, impacting overall productivity.

Cash Collections

The total amount of money received from customers over a period, including payments for goods or services sold.