Dirth Company Sells Only One Product at a Regular Price

question 53

Multiple Choice

Dirth Company sells only one product at a regular price of $7.50 per unit.Variable expenses are 60 percent of sales and fixed expenses are $30,000.Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales.
- What is the new break-even point in units for Dirth Company when the selling price is $6.00?

• A)4,000 units
• B)6,667 units
• C)10,000 units
• D)20,000 units

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Definitions:

Marginal Benefit

The supplementary enjoyment or value derived by a person upon consuming an extra unit of a particular good or service.

Marginal Cost

The cost of producing one additional unit of a good or service.

Marginal Benefit

Marginal benefit is the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Sushi Bar

A restaurant specializing in sushi, offering a variety of raw fish and seafood dishes, often served on a conveyer belt or prepared to order.