Which of the Following Equations Is Correct for Determining the Required

question 9

Multiple Choice

Which of the following equations is correct for determining the required sales in units to generate a targeted amount of pre-tax income (πB) under the equation method (where Q = sales in units, F = total fixed costs, πB = pre-tax profit, v = variable cost per unit, and p = selling price per unit) ?

• A) [vQ + F] + πB − pQ = 0.
• B) vQ − F + πB − pQ = 0.
• C) F − πB − vQ − pQ = 0.
• D) pQ + vQ + F + πB = 0.
• E) πB = F × (p − v)Q.

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Definitions:

Opportunity Cost

The cost of forfeiting the next best alternative when making a decision, representing the benefits missed when choosing one option over another.

Alfalfa

A perennial flowering plant often used as forage for livestock, valued for its high nutrient content and adaptability to diverse climates.

Trade Benefit

The advantages a country gains from engaging in international trade, such as access to a wider variety of goods and services, economies of scale, and increased market competition.

Produce Alfalfa

The process of cultivating and harvesting alfalfa, a perennial flowering plant used primarily as fodder for livestock.