Capital One Produces a Single Product,which It Sells for $8

question 41

Multiple Choice

Capital One produces a single product,which it sells for $8.00 per unit.Variable costs per unit equal $3.20.The company expected total short-term fixed costs to be $7,200 for the coming month,at the projected sales level of 20,000 units.Management is considering several alternative actions designed to improve operating results.In conjunction with this,they have created a profit-planning model,which can be used to evaluate different scenarios.
Suppose that management believes that a $1,600 increase in the monthly promotion costs will provide a boost to sales.By what amount must sales increase during the month to justify the contemplated expenditure? Round up to the nearest whole number.

• A)200 units.
• B)334 units.
• C)400 units.
• D)668 units.
• E)None of the above.

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Definitions:

Collaboration

Working jointly with others, especially in an intellectual endeavor, to achieve a common goal through the sharing of knowledge, learning, and building consensus.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.

Poor Performance

Refers to a situation where an individual or group fails to meet established standards or objectives.

Satisfaction

The feeling of fulfillment or pleasure that arises from achieving one's goals or having one's needs or expectations met.