Vango Industries Sells Two Products,Basic Models and Deluxe Models

question 100

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 breakeven point in total units?

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

---

Definitions:

Inventory Costing Method

A system used to value inventory, such as First-In, First-Out (FIFO) or Last-In, First-Out (LIFO), impacting the calculation of cost of goods sold and ending inventory.

LIFO

Last In, First Out; an inventory valuation method where the last items placed in inventory are the first ones to be used or sold.

Ending Inventory

The total value of a business’s merchandise, raw materials, and products not yet sold at the end of an accounting period.

FIFO

"First In, First Out," an inventory valuation method where goods first acquired are the first to be sold, used in accounting to calculate the cost of goods sold.