Management at the Forrest Company Currently Sells Its Products for $225

question 15

Multiple Choice

Management at the Forrest Company currently sells its products for $225 per unit and is contemplating a 40% increase in the selling price for the next year. Variable costs are currently 25% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will still pay the same variable cost per unit) . Fixed expenses are $119,000 per year. If fixed costs were to decrease 10% during the current year and the new selling price goes into effect, how many units will need to be sold to breakeven?

• A)414 units
• B)340 units
• C)476 units
• D)149,940 units

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Definitions:

Sister Chromatids

Identical copies of a chromosome, connected by a centromere, that are produced during DNA replication.

Anaphase II

A stage of meiosis II where the sister chromatids are separated and pulled towards opposite poles of the cell.

Luteinizing Hormone

Luteinizing Hormone is a hormone produced by the anterior pituitary gland that triggers ovulation in females and stimulates the production of testosterone in males.

Gonadotropin-Releasing Hormone

A hormone responsible for the regulation of reproduction, stimulating the release of other hormones from the pituitary gland.