Hooper Corporation Produces and Sells Two Models of Vacuum Cleaners

question 113

Multiple Choice

Hooper Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. The company records show the following monthly data relating to these two products:
$\begin{array} {| l | r | r | } \hline & \text { Standard } & \text { Deluxe } \\\hline \text { Selling price per unit } & \$ 150 & \$ 165 \\\hline \text { Variable production costs } & \$ 120 & \$ 126 \\\hline \begin{array} { l } \text { Variable selling expense per } \\\text { unit }\end{array} & \$ 16 & \$ 13 \\\hline \begin{array} { l } \text { Expected monthly sales in } \\\text { units }\end{array} & 600 & 1,200 \\\hline \begin{array} { l } \text { Total monthly fixed cost } \\\text { (common in both) }\end{array} & & \$ 15,000 \\\hline\end{array}$


-If the expected monthly sales in units were divided equally between the two models (900 Standard and 900 Deluxe) ,where would the break-even level of sales be as compared to the expected sales mix?

• A) The same as with the expected sales mix.
• B) Higher than with the expected sales mix.
• C) Lower than with the expected sales mix.
• D) Cannot be determined with the available data.

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Definitions:

Psychodynamic Approach

A psychological perspective that emphasizes the systematic study of the psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.

Cognitive-Behavioral Approach

A psychological approach that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic process.

Unipolar Depression

A major depressive disorder characterized by a persistent feeling of sadness or lack of interest, without the mood swings seen in bipolar disorder.

Psychoanalytic Theory

A body of theories developed by Sigmund Freud, which posits that human behavior is the outcome of interactions among various components of the mind, including the id, ego, and superego.