Zed Company Sells Two Kinds of Mainframe Computer Power Supplies

question 128

Multiple Choice

Zed Company sells two kinds of mainframe computer power supplies.The company projected the following cost information for the two products: $$\begin{array} { | l | r | r | } \hline & { \begin{array} { l } \text { Standard } \\\text { Supply }\end{array} } &{ \begin{array} { l } \text { Heavy-Duty } \\\text { Supply }\end{array} } \\\hline \text { Unit selling price } & \$ 250 & \$ 120 \\\hline \text { Unit variable cost } & \$ 110 & \$ 50 \\\hline \begin{array} { l } \text { Number of units produced and } \\\text { sold }\end{array} & 7,000 & 3,000 \\\hline\end{array}$$ Assume that total fixed costs are $428,400.How many units of the standard supply unit would be included in the total number of units required to break-even with the projected sales mix (round your answer to the nearest whole unit) ?

• A) 3,600 units
• B) 2,520 units
• C) 1,080 units
• D) 2,040 units

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Definitions:

Preferred Shares

A type of stock that provides dividends to shareholders before common stockholders and may have preferential treatment in asset distribution upon liquidation.

Shareholder

An individual or entity that owns shares in a company, thus holding a portion of the company's equity and often having voting rights.

Sell Shares

This refers to the act of transferring ownership of stock or equity interests in a company from one party to another, typically in exchange for monetary compensation.

Circumstances

The conditions or facts affecting a situation, event, or action.