The Allen Company Had the Following Income Statement for the Month

question 67

Multiple Choice

The Allen Company had the following income statement for the month of July: $\begin{array}{c}\text { Allen Company}\\\text { Income Statement}\\\text { For the Month of July}\\\\\begin{array}{lrr}\text { Sales }(\$ 60 \times 10,000) & & \$ 600,000 \\\text { Cost of goods sold: } & & \\\text { Direct materials }(\$ 12 \times 10,000) & \$ 120,000 \\\text { Direct labour }(\$ 9 \times 10,000) & 90,000 & \\\text { Variable factory overhead }(\$ 7.50 \times 10,000) & 75,000 \\\text { Fixed factory overhead } & \underline{120,000} & \underline{405,000} \\\text { Gross profit } & & \$ 195,000 \\\text { Selling and administrative expenses: } \\\text { Variable }(\$ 1.50 \times 10,000) & \$ 15,000 & \\\text { Fixed }& \underline{90,000} & \underline{105,000} \\\text { Operating income }& & \$ 90,000\end{array}\end{array}$
-What is the sales volume required to earn a profit of $9,000?

• A)3,300 units
• B)4,300 units
• C)7,300 units
• D)10,000 units

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