Preston Milled Products Currently Sells a Product with a Variable

question 22

Multiple Choice

Preston Milled Products currently sells a product with a variable cost per unit of $21 and a unit selling price of $40.At the present time,the firm only sells on a cash basis with monthly sales of 2,800 units.The monthly interest rate is 0.5 percent.What is the switch break-even point if the firm switched to a net 30 credit policy? Assume the selling price per unit and the variable costs per unit remain constant.

• A)2,830 units
• B)2,910 units
• C)3,333 units
• D)3,414 units
• E)3,526 units

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