Urban Incorporated Had the Following Information - How Many Units Need to Be Sold to Produce

question 2

Multiple Choice

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

$\begin{array}{lc}\text { Other data: } & &\\\text { Total fixed costs (traditional) } & \$ 600,000 \\\text { Total fixed costs (ABC) } & \$ 300,000 \\\text { Unit selling price } & \$ 60\end{array}$
- How many units need to be sold to produce a before-tax profit of $80,000 using ABC?

• A)7,500 units
• B)11,500 units
• C)14,000 units
• D)13,250 units

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Definitions:

Personal Distribution

The distribution of income and wealth among individuals and households in an economy.

Gini Ratio

An index that quantifies the disparity in income distribution among a population, where 0 signifies complete equality and 1 denotes complete disparity.

Income Distribution

The way in which total income is shared among the population or different groups within a society.

Top Fifth

Often refers to the top 20% segment of a distribution, commonly used in the context of income or wealth distribution.