Zealz Manufacturing Produces a Single Product That Sells for $80

question 158

Multiple Choice

Zealz Manufacturing produces a single product that sells for $80.Variable costs per unit equal $30.The company expects total fixed costs to be $70,000 for the next month at the projected sales level of 2,000 units.In an attempt to improve performance,management is considering a number of alternative actions.Each situation is to be evaluated separately.What is the current breakeven point in terms of number of units?

• A) 1,400 units
• B) 2,250 units
• C) 3,333 units
• D) 1725 units

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Definitions:

Capital Goods

Physical assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.

Consumer Goods

Products produced for purchase by individuals and households for personal use, such as clothing, food, and electronics.

Industrialize

The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods.

Market-Oriented Economy

An economy in which decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.