How Many Units Would Have to Be Sold to Yield

question 84

Multiple Choice

How many units would have to be sold to yield a target income of $11,000 assuming variable costs are $30 per unit, total fixed costs are $1,000, and the unit selling price is $40?

• A)1,200 units
• B)1,100 units
• C)1,000 units
• D)900 units
• E)300 units

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Definitions:

Price-to-earnings Ratios

A valuation metric that compares the market price of a stock to its per-share earnings, used to evaluate if a stock is over or undervalued.

Weak Form

A market efficiency hypothesis that suggests past prices and volumes have no effect on future prices, implying that past market data cannot be used to predict future market movements.

Efficient Market Hypothesis

A theory suggesting that at any given time, securities prices reflect all available information, meaning it's impossible to consistently achieve higher returns.

Superior Returns

Returns that exceed the performance of a benchmark index or the average returns of a particular investment category.