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

question 55

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.
What is the current break-even point in terms of number of units for the month?

• A)1,500 units.
• B)2,250 units.
• C)3,330 units.
• D)4,000 units.

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Definitions:

Warehousing Space

The area allocated for the storage of goods in a building or designated area until they are ready to be shipped or sold.

Enrollment

The process of registering or entering into a membership, course, or program.

Accredited College

An educational institution that has formally met the quality standards set by an official accrediting body, ensuring its offerings are recognized and respected.

Market Conditions

The various external factors affecting the supply, demand, and pricing of products or services in an industry.