Vango Industries Sells Two Products, Basic Models and Deluxe Models

question 109

Multiple Choice

Vango Industries sells two products, Basic models and Deluxe models. Basic models sell for $40 per unit with variable costs of $30 per unit. Deluxe models sell for $48 per unit with variable costs of $40 per unit. Total fixed costs for the company are $76,000. Vango Industries typically sells three Basic models for every Deluxe model. What is the break-even point in total units?

• A) 6,909 units
• B) 8,000 units
• C) 13,818 units
• D) 4,000 units

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Definitions:

Note Payable

A written promise to pay a specific sum of money on a future date or dates, typically with interest.

Journal Entry

A record in accounting that notes the debit and credit effects of a financial transaction.

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The acquisition of a truck, which is a capital investment and may be classified as a fixed asset on the balance sheet.

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