The Results of AB/CB Company Are as Follows How Many More Units Do They Need to Sell to l

question 16

Multiple Choice

The results of AB/CB company are as follows:
$$\begin{array} { l c c } \text { Sales } & 15,000 \text { units at } £ 45 \text { each } & 675,000 \\\text { Variable costs at } & £ 37.50 \text { each } & 562,500 \\\text { Fixed costs } & & 67,500 \\\text { Profit } & & 45,000\end{array}$$
How many more units do they need to sell to make a profit of £75,000?

• A) 90 units
• B) 667 units
• C) 1467 units
• D) 4000 units

Comprehend the accounting for long-term investments using the cost method.

Distinguish between available-for-sale, held-to-maturity, and trading securities and their impact on net income.

Calculate the correct amount to be shown in the investment account based on dividends received and percentage of ownership.

Identify the relationship and accounting treatment for parent and subsidiary companies.

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Definitions:

Long-Run Adjustments

Long-run adjustments are changes made by firms or industries in response to shifts in market conditions over a longer period, involving variations in production levels and the entry or exit of firms.

Market Price

The present cost at which a service or asset is available for purchase or sale in a specific market.

Downward Sloping

Describes a line on a graph that shows a decrease in one variable as another variable increases, commonly used in economics to illustrate demand curves.

Representative Firms

Firms selected as typical or average examples of a broader industry or sector, often used for analysis or benchmarking.