Fixed Costs Are $600,000 and the Variable Costs Are 75

question 89

Multiple Choice

Fixed costs are $600,000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars?

• A)$1,400,000
• B)$1,800,000
• C)$2,400,000
• D)$800,000

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Definitions:

Physical Inventory

The process of counting all physical goods and materials a company has in stock at a specific point in time.

Items Count

The process of tallying items in inventory, usually for the purpose of ensuring accuracy in stock levels and financial records.

Retail Method

An accounting method for inventory valuation in which ending inventory and cost of goods sold are determined by applying a constant gross margin percentage.

Inventory Cost

The total cost associated with acquiring, holding, and processing inventory, including purchase costs, storage fees, and handling charges.