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:

Portfolio Weights

Percentage of a portfolio’s total value in a particular asset.

Market Values

The listed market price for an asset or service available for immediate transaction.

Corporate Bonds

Debt securities issued by corporations to fund their operations, capital improvements, or expansions, offering periodic interest payments and the return of principal at maturity.

R-134a

Current (2018) A/C refrigerant used in HD trucks and not projected for phase-out in the near future. GWP rating is 1,430.