The BEP, in Units, Can Be Found by Dividing

question 162

Multiple Choice

The BEP, in units, can be found by dividing

• A) total fixed costs by the fixed cost contribution per unit.
• B) total variable costs by the variable cost contribution per unit.
• C) total variable costs by the fixed cost contribution per unit.
• D) the assumed selling price per unit by the variable cost per unit.
• E) total variable costs by total fixed costs.

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Definitions:

Goodwill

A non-physical asset that is created when one company is bought by another for an amount exceeding the fair market value of the acquired company's net identifiable assets.

Non-Controlling Interest

The portion of equity ownership in a subsidiary not attributed to the parent company, often reflected in the consolidated financial statements.

Entity Method

A consolidation approach where investments are recorded at cost without adjustment for the investee's post-acquisition activities.

Parent-Company Extension Method

A method of consolidation where the financial statements of the parent company are extended to include the financial information of its subsidiaries.