A Product Sells for $210 Per Unit,and Its Variable Costs

question 102

Multiple Choice

A product sells for $210 per unit,and its variable costs per unit are $130.The fixed costs are $420,000.If the firm wants to earn $35,000 after tax income (assume a 30% tax rate) ,how many units must be sold?

• A) 6,500
• B) 6,275
• C) 500
• D) 5,875
• E) 5,500

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Definitions:

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a predetermined price.

Bondholder's Risk

The risk faced by bond investors that the issuer may fail to make payments when due or violate terms of the bond agreement.

Carrying Value

The carrying value is the book value of assets and liabilities recorded on the balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Unamortized Discount

The portion of a bond discount that has not yet been amortized or gradually written off over the life of the bond.