For the Past Year, Pedi Company Had Fixed Costs of $70,000

question 171

Essay

For the past year, Pedi Company had fixed costs of $70,000, unit variable costs of $32, and a unit selling price of $40. For the coming year, no changes are expected in revenues and costs, except that property taxes are expected to increase by $10,000. Determine the break-even sales
(units) for
(a) the past year and
(b) the coming year.

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Definitions:

Numerator

The top number in a fraction, representing the part of the whole or the dividend in division.

Chi-square Distribution

A statistical distribution that describes the distribution of the sum of the squares of a set of variables, often used in hypothesis testing.

Random Variable

A variable that can take on numerical values based on the outcomes of a random event.

Value

The importance, worth, or usefulness of something or a numerical quantity measured or assigned or computed.