Tony's Beach T-Shirts Has Fixed Annual Operating Costs of $75,000

question 187

Multiple Choice

Tony's Beach T-Shirts has fixed annual operating costs of $75,000. Tony retails his T-shirts for $14.99 each and the variable cost per T-shirt is $4.99. Based on this information, the breakeven sales level in units is ________.

• A) 7,500
• B) 15,030
• C) 5,003
• D) 3,754

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Definitions:

Cash Payments

Transactions in which money is paid out by a business, often for expenses, debts, or purchases.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash accounts to reveal net cash from operating activities.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activity into operating, investing, and financing activities.

Operating Activities

Transactions and events that relate to the primary operations of the company, including revenue and expense activities.