Given Breakeven Sales in Units of 31,000 and a Unit

question 73

Multiple Choice

Given breakeven sales in units of 31,000 and a unit contribution margin of $10, how many units must be sold to reach a target operating income of $15,000?

• A)29,500
• B)150,000
• C)32,500
• D)1500

Distinguish between the fixed and variable components of the predetermined overhead rate

Evaluate overhead application and its impact on product cost

Identify the effects of denominator activity level choices on overhead variances

Apply standard cost variances to management decision-making processes

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Definitions:

Upper Limit

The maximum value in a set or the highest value that a variable can take.

Significance Level

A threshold chosen by a researcher or statistician below which a p-value indicates a statistically significant result, rejecting the null hypothesis.

Mean Age

The average age of all individuals in a particular group or set, calculated by summing their ages and dividing by the number of individuals.

Life Insurance

A contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured.