A Product Sells for $30 Per Unit and Has Variable

question 191

Multiple Choice

A product sells for $30 per unit and has variable costs of $18 per unit.The fixed costs are $720,000.If the variable costs per unit were to decrease to $15 per unit,fixed costs increase to $900,000,and the selling price does not change,break-even point in units would:

• A)Increase by 20,000.
• B)Equal 6,000.
• C)Increase by 6,000.
• D)Decrease by 20,000.
• E)Not change.

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Definitions:

Actual Output

The real quantity of goods or services produced by a company or a production process.

Change in Backlog

The variation in the quantity of unfulfilled orders or processes that are yet to be completed over a period of time.

Assignment Method

A mathematical technique used for allocating resources or tasks to recipients or locations in an optimal way.

Job Profit

The financial gain obtained from completing a specific project or job, calculated as the difference between the revenue generated and the costs incurred.