Miniature Molding Is Planning to Introduce a Valve for Use

question 33

Multiple Choice

Miniature Molding is planning to introduce a valve for use in medical implants. Variable costs per unit are $250. The maximum price MM could charge is $325. Fixed costs associated with this product are $20,000,000. The worst case forecast calls for sales of 240,000 valves, the best case for 290,400. Will MM reach accounting break-even in the worst case scenario?

• A) Sales will fall short of break even by $8,666,667.
• B) The product will exactly break even.
• C) Sales will fall short of break even by $5,000,025.
• D) Sales will exceed break even $58,000,000.

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