Waterside Company Sells Two Products, Yellow Models and Striped Models

question 80

Multiple Choice

Waterside Company sells two products, Yellow models and Striped models. Yellow models sell for $50 per unit with variable costs of $30 per unit. Striped models sell for $60 per unit with variable costs of $25 per unit. Total fixed costs for the company are $20,000. Waterside Company typically sells one yellow model for every three striped models. What is the break-even point in total units?

• A) 640 units
• B) 239 units
• C) 941 units
• D) 320 units

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Definitions:

Account Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Credit Terms

Terms for payment on account by the buyer to the seller.

Sales Discount

A reduction in the sale price offered by a seller to a buyer, usually to encourage prompt payment or to increase sales volume.

Invoice Date

Invoice Date refers to the date listed on an invoice, indicating when it was issued and often starting the timeline for payment due.