Horton and Associates Produces Two Products Named BigBlast and LittleBlast

question 67

Multiple Choice

Horton and Associates produces two products named BigBlast and LittleBlast. Last month 4,000 units of BigBlast and 1,000 units of the LittleBlast were produced and sold. Following are average prices and costs for last month: The production lines for both products are highly automated, so large changes in production cause very little change in total direct labor costs. Workers who are classified as direct labor monitor the production line and are permanent employees who regularly work 40 hours per week. All costs other than "corporate fixed costs" listed under each product line could be avoided if the product line were dropped. What is the breakeven sales volume (in units) for BigBlast? (In other words, what is the sales volume at which Horton should be financially indifferent between dropping and keeping BigBlast?)

• A) 728 units
• B) 2,545 units
• C) 1,084 units
• D) 790 units

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Definitions:

Battery

In legal terms, an intentional unconsented-to physical contact or harm caused by one person to another.

Assault

An act creating a fear in another person of imminent harmful or offensive contact.

Intrusion

Unauthorized or unwanted entry into another person’s space, privacy, or affairs.

False Light

A privacy tort that occurs when highly offensive information is published about an individual that is not valid or places the person in a false light.