A Firm Sells Two Products, Regular and Ultra A) 62,000 Regular Units and 31,000 Ultra Units

question 124

Multiple Choice

A firm sells two products, Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow. What is the firm's break-even point in units of Regular and Ultra? $\begin{array} { l r r r } & \text { Unit Sales } & \text { Variable Cost Per } \\\text { Product } & \text { Price } & \text { Unit } & \\\text { Regular } & \$ 20 & & \$ 8 \\\text { Ultra } & 24 & & 4\end{array}$

• A) 62,000 Regular units and 31,000 Ultra units.
• B) 31,000 Regular units and 31,000 Ultra units.
• C) 10,333 Regular units and 20,667 Ultra units.
• D) 36,167 Regular units and 72,333 Ultra units.
• E) 31,000 Regular units and 62,000 Ultra units.

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Definitions:

Cash Dividend

A payment made by a company out of its earnings to shareholders, usually in cash.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Earnings Per Share

A financial metric calculated by dividing the company's net income by the number of its outstanding shares, indicating profitability on a per-share basis.

Income Statement

A financial document that reports a company's financial performance over a specific period, including revenue, expenses, and net income.