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.

---

Definitions:

Dividends

Payments made by a corporation to its shareholders from the company's profits or reserves.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, representing the owners' share in the corporation.

Balance Sheet

A financial statement that outlines a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Additional Paid-in Capital

Additional paid-in capital is the amount of money shareholders have invested in the company above the par value of the shares, representing excess capital that is not classified as profit.