A Maker of Computer Games Expects to Sell 500,000 Games

question 63

Multiple Choice

A maker of computer games expects to sell 500,000 games at a price of $49 per game.These units cost $12 to produce.Selling,general,and administrative expenses are $1.2 million and the CCA deduction is $280,000.What is the EBIT break-even point for the number of games sold in this case?

• A)24,865
• B)30,192
• C)30,204
• D)40,000
• E)44,740

---

Definitions:

Stock Investment

Placing capital into stocks or equity securities of companies to potentially earn returns through dividends or capital gains.

Operating Activity

Transactions and events that are directly related to the primary business operations of a company, such as sales revenue and expense transactions.

Financing Activity

Transactions involved in raising, repaying, or restructuring the capital funding of a company, as reflected in the cash flow statement.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from revenue.