Koby CoHas Sales of $200,000 with Variable Expenses of $150,000,fixed Expenses

question 14

Multiple Choice

Koby Co.has sales of $200,000 with variable expenses of $150,000,fixed expenses of $60,000,and a net loss of $10,000.How much would Koby have to sell in order to achieve an operating income of 10% of sales?

• A) $375,000.
• B) $451,000.
• C) $431,000.
• D) $400,000.Sales = 60,000/(.25 - .10)= $400,000

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Definitions:

Product Costs

Costs that are directly linked to the creation of a product, including materials, labor, and overhead.

September

The ninth month of the Gregorian calendar.

Manufacturing Overhead Cost

All indirect costs associated with manufacturing, including indirect labor, materials, and expenses that cannot be directly attributed to a specific product.

Units Produced

The total quantity of finished goods a company produces over a specific period of time.