WenWen Company Makes and Sells Two Types of Peanut Butter

question 33

Multiple Choice

WenWen Company makes and sells two types of peanut butter, Smooth and Chunky. Data concerning these products are as follows: $\begin{array} { l c c } & \text { Smooth } & \text { Chunky } \\\text { Unit selling price } & \$ 40.00 & \$ 55.00 \\\text { Variable cost per unit } & 16.00 & 24.50\end{array}$ Forty percent of the unit sales are Chunky, and annual fixed expenses are $159,600. Assuming that the sales mix remains constant, the total number of units that the company must sell to break even is:

• A)2,928.
• B)5,233.
• C)5,720.
• D)6,000.
• E)6,650.

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Definitions:

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than competitors.

Barrels

A unit of measure for volume commonly used in the oil industry, equivalent to 42 U.S. gallons.

Shirts

Garments for the upper body, typically with sleeves and a collar, made from various fabrics and used as clothing.

Wine

An alcoholic beverage made from fermented grapes or other fruits.