Dirth Company Sells Only One Product at a Regular Price

question 101

Multiple Choice

Dirth Company sells only one product at a regular price of £7.50 per unit. Variable expenses are 60 percent of sales and fixed expenses are £30,000. Management has decided to decrease the selling price to £6.00 in hopes of increasing its volume of sales. What is the monetary sales level required to break even at the old price of £7.50?

• A) £75,000
• B) £12,000
• C) £18,000
• D) £50,000

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Definitions:

Comparative Advantage

The basis of most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items.