Huston Company Has Annual Fixed Costs Totaling $3,000,000 and Variable

question 54

Multiple Choice

Huston Company has annual fixed costs totaling $3,000,000 and variable costs of $450 per unit.Each unit of product is sold for $850.Assume a tax rate of 30 percent.How many units must be sold to earn an annual profit of $210,000 after taxes?

• A)8,250
• B)4,586
• C)9,250
• D)8,025
• E)None of the answer choices is correct.

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Definitions:

Diseconomies Of Scale

Refers to the phenomenon where, beyond a certain point, increasing production results in a rise in the average cost of each unit produced due to factors like management inefficiencies and logistic issues.

Unit Costs

The cost incurred to produce, store, and sell one unit of a product, calculated by dividing the total costs by the number of units produced.

Production Increases

The rise in the amount of goods or services produced by a company, often due to greater demand or improved efficiency.

Buying Product

Involves the process of selecting and purchasing products for personal use, for resale, or for use in manufacturing other products.