YY Company Has the Following Information Available: If Variable

question 132

Multiple Choice

YY Company has the following information available: If variable costs increase to $65 per unit and fixed costs increase $200,000,what is the break-even point in units?

• A)11,273
• B)12,000
• C)20,000
• D)17,714

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Definitions:

Unused Capacity

The available but not currently utilized production or service capacity of a company, which can signify lost revenue opportunities.

Time-based Activity-based Costing

An advanced form of activity-based costing that adds the dimension of time, improving the accuracy of allocating costs based on the actual activities that consume resources.

Overhead Costs

Indirect costs not directly traceable to a specific product or service, including utilities, rent, and managerial salaries.

Activity Rate

An activity rate is the cost driver rate used in activity-based costing to allocate overhead costs to products or services.