The Axle Division of LaBate Company Makes and Sells Only

question 25

Multiple Choice

The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow:
$\begin{array}{|l|r|}\hline \text { Unit Selling Price } & \$ 50 \\\hline \text { Unit Variable Cost } & \$ 30 \\\hline \text { Total Fixed Costs } & \$ 200,000 \\\hline \text { Average Operating Assets } & \$ 750,000 \\\hline \text { Minimum Required Rate of Return } & 12 \% \\\hline\end{array}$
-Suppose the manager of Axle desires an annual residual income of $45,000.In order to achieve this,Axle should sell how many units per year?

• A) 14,500 units.
• B) 16,750 units.
• C) 18,250 units.
• D) 19,500 units.

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Definitions:

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