Gitli Company Sells Its Product for $60 and Has Variable

question 112

Multiple Choice

Gitli Company sells its product for $60 and has variable cost of $35 per unit.The total fixed costs are $26,000.What will be the effect on the breakeven point in units if variable cost increases by $5 due to an increase in the cost of direct materials? (Round your answer up to the nearest whole unit.)

• A) It will increase by 260 units.
• B) It will decrease by 260 units.
• C) It will decrease by 176 units.
• D) It will increase by 176 units.

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Definitions:

Forward Contract

A contractual agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Partial Trial Balance

A component of a trial balance that includes selected accounts or transactions, often used for analyzing or adjusting specific financial information.

Spot Rates

The present market rate at which a currency is available for immediate purchase or sale.

Merchandise

Goods or items that a business sells to its customers.