The Following Is Addison Corporation's Contribution Format Income Statement for Last

question 80

Multiple Choice

The following is Addison Corporation's contribution format income statement for last month:

$\begin{array} { | l | r | } \hline \text { Sales } & \$ 1,000,000 \\\hline \text { Less: variable expenses } & \underline { 700,000 } \\\hline \text { Contribution margin } & 300,000 \\\hline \text { Less: fixed expenses } & \underline { 180,000 } \\\hline \text { Operating income } & \$ 120,000 \\\hline\end{array}$ The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month.

-What is the company's break-even in units?

• A) 20,000 units.
• B) 0 units.
• C) 18,000 units.
• D) 12,000 units.

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Definitions:

Capital

Resources or assets used in the production of goods and services, such as machinery, buildings, and equipment.

Resources

Inputs used in the production of goods and services, including labor, capital, land, and technology.

New Capital

Funds or equity obtained by a company for the purpose of furthering its business objectives, or the addition of assets.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.