A Company Has Monthly Fixed Costs of $115,500

question 287

Multiple Choice

A company has monthly fixed costs of $115,500. The variable costs are $5.00 per unit. If the sales price of a unit is $15.00 and we sell 7700 units, the company's average fixed costs per unit will be

• A)$10.00 per unit.
• B)$5.00 per unit.
• C)$20.00 per unit.
• D)$15.00 per unit.

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Definitions:

Fiscal Year

A twelve-month period used for accounting purposes and preparation of financial statements, which may not align with the calendar year.

Withdrawals

The act of taking out cash or other assets from a business by the owner for personal use.

Investments

Financial assets purchased with the expectation they will generate income or appreciate in the future.

Balance Sheet

The balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.