Your Memory Lane Produces Custom-Made Art Prints That Include Graphics

question 68

Multiple Choice

Your Memory Lane produces custom-made art prints that include graphics and icons to celebrate life's special moments.For example,on his wedding anniversary,David had an art print produced that celebrated highlights of his ten years with his wife,Kathy.Suppose that Your Memory Lane sells the custom artwork for $500.It estimates its average variable costs to be $200 per unit produced.It figures its fixed costs to be $900,000 per year.How many prints does it have to sell to break even?

• A) 2,000 prints
• B) 1,200 prints
• C) 3,000 prints
• D) 2,500 prints
• E) 6,000 prints

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Definitions:

Master Budget

A comprehensive financial planning document that consolidates all of a company's budgets for various departments or activities.

Manufacturing Overhead Budget

An estimation of the costs that are not directly attributable to products but are necessary for the manufacturing process, including utilities, depreciation, and maintenance of equipment.

Non-Cash Charges

Expenses reported on the income statement that do not require an actual cash outflow, such as depreciation and amortization.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life.