A Company's Product Sells at $12 Per Unit and Has

question 22

Multiple Choice

A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. The break-even point in units is:

• A) 5,158.
• B) 7,000.
• C) 8,167.
• D) 14,000.
• E) 19,600.

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Definitions:

Equitable Obligation

An obligation based on fairness, ethics, or natural law, rather than on a contractual or legal requirement.

Present Obligation

An obligation that arises from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a specific event.

Liabilities

Financial obligations or debts that an entity owes to others, which must be settled in the future through the transfer of assets or services.