In the Current Year,the Company Sold 43,000 Units

question 10

Multiple Choice

In the current year,the company sold 43,000 units.Due to competition,management will be forced to lower the selling price by 10% next year.How many units must be sold next year to earn the same operating income as was earned in the current year?

• A) 50,000 units.
• B) 53,200 units.
• C) 58,800 units.
• D) 60,200 units.New CM = 40 * (1 - .10)- 20 - 6 = $10.Units required = (532,000 + 70,000)/10 = 60,200 units.

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Definitions:

Potential Manipulation

The possibility of altering financial data or operational practices to present a misleading view of a company's financial health or performance.

Compensation Arrangements

Agreements between an employer and an employee or contractor detailing the terms of payment, benefits, and incentives.

Financial Statements

Financial Statements are formal records of the financial activities and position of a business, person, or other entity.

Accrued Wage Expense

An accounting term referring to wages that have been earned by employees but have not yet been paid by the company.