Answer the Following Questions Using the Information Below

question 118

Multiple Choice

Answer the following questions using the information below:
Ghan Manufacturing produces a single product that sells for $80.Variable costs per unit equal $32.The company expects total fixed costs to be $72 000 for the next month at the projected sales level of 2000 units.In an attempt to improve performance,management is considering a number of alternative actions.Each situation is to be evaluated separately.
-Suppose management believes that a $32 000 increase in the monthly advertising expense will result in a considerable increase in sales.Sales must increase by how much to justify this additional expenditure?

• A)400 units
• B)667 units
• C)800 units
• D)None of these answers are correct.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Bank Borrowings

Funds that have been obtained from a bank through various types of loans.

Cash Management

The practice of collecting, managing, and investing cash in a way that meets the financial objectives of the organization.

Financing Activities

Transactions involving raising capital or repaying funds to owners and creditors, reflected in a firm's cash flow.