Urban Incorporated Had the Following Information - What Is the Break-Even Point in Units Using ABC

question 38

Multiple Choice

Urban Incorporated had the following information: $\begin{array}{lcc} \underline{\text { Activity Driver}}& \underline{\text { Unit Variable Cost }}&\underline{\text { Level of Activity Driver}}\\\text { Units sold } & \$ 20 & -- \\\text { Setups } & 1,200 & 60 \\\text { Engineering hours } & 52&1,500 \\\end{array}$

$\begin{array}{lc}\text { Other data: } & &\\\text { Total fixed costs (traditional) } & \$ 600,000 \\\text { Total fixed costs (ABC) } & \$ 300,000 \\\text { Unit selling price } & \$ 60\end{array}$
- What is the break-even point in units using ABC?

• A)5,625 units
• B)7,500 units
• C)11,250 units
• D)16,875 units

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Definitions:

Production Cost

The total cost incurred by a company to manufacture a product, including labor, materials, and overhead expenses.

Budgeted Balance Sheet

A financial report that projects a company's financial position at a future date, estimating assets, liabilities, and owner's equity.

Master Budget

A comprehensive financial plan that includes all elements of an organization's operations, combining several individual budgets into one.

Sales Budget

A financial plan that estimates future sales, often used to guide marketing and sales strategies.