LL Company Produces and Sells a Product That Has Variable

question 40

Multiple Choice

LL Company produces and sells a product that has variable costs of $9 per unit and fixed costs of $200,000 per year.If production decreases from 50,000 to 40,000 units,the cost per unit will ________.

• A)increase by $1
• B)increase by $13
• C)decrease by $1
• D)decrease by $14

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Definitions:

Financial Reports

Periodic statements that provide information about a company's financial status, including balance sheets, income statements, and cash flow statements.

Primary Financial Statements

Critical financial documents including the balance sheet, income statement, statement of cash flows, and statement of shareholders' equity, which provide an overview of a company's financial health.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, culminating in the net profit or loss.

Balance Sheet

A financial statement that gives a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and shareholders' equity.