Gabe Industries Sells Two Products,Basic Models and Deluxe Models

question 174

Multiple Choice

Gabe Industries sells two products,Basic models and Deluxe models.Basic models sell for $42 per unit with variable costs of $30 per unit.Deluxe models sell for $50 per unit with variable costs of $40 per unit.Total fixed costs for the company are $75,400.Gabe Industries typically sells four Basic models for every Deluxe model.What is the breakeven point in total units?

• A)6,500 units
• B)3,900 units
• C)9,921 units
• D)5,953 units

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Definitions:

Cash Burn Rates

The speed at which a company spends its cash reserves, especially common in startups to gauge the time they can operate before needing more funding.

Rapid Growth

refers to a phase where a company or economy experiences an unusually fast increase in its size, revenue, or market.

Entrepreneurial Leadership

A leadership style that blends innovation, risk-taking, and proactiveness, typically adopted in startups or organizations seeking significant growth.

Liquid Noncash Asset

Assets that can be quickly converted into cash without significantly affecting their value, but are not already in cash form.