A Firm Has Fixed Costs of $1

question 83

Multiple Choice

A firm has fixed costs of $1.2 million and depreciation of $1 million.Variable costs are 64% of sales.What is the accounting break-even level of sales?

• A) $5.23 million
• B) $3.44 million
• C) $6.11 million
• D) $4.87 million

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Definitions:

Conversion Factor

A numerical value used to convert a quantity expressed in one unit to the equivalent quantity expressed in another unit.

Pounds

A unit of weight commonly used in the United States, equivalent to 0.453592 kilograms.

Kg

Abbreviation for kilogram, a unit of mass equal to one thousand grams.

Dimensional-Analysis

A method in mathematics and physics to check the correctness of an equation by analyzing the dimensions (units) of the quantities involved.