If Variable Costs Are $46 Per Unit, Revenues Are $76

question 38

Multiple Choice

If variable costs are $46 per unit, revenues are $76 per unit, and fixed costs are $7,500, the break-even point is:

• A) 1,000 units
• B) 500 units
• C) 250 units
• D) 100 units

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Definitions:

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue.

Company Assets

Resources owned by a company that have economic value and can contribute to future profits, such as cash, inventory, and equipment.

Profitability

A measure of the efficiency of a company in generating profit relative to its revenue, costs, and investments.

Quick Ratio

A financial metric that measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.