During the Past Year a Company Had Total Fixed Costs

question 17

Multiple Choice

During the past year a company had total fixed costs of $70,000.Its product sold for $9 per unit.Variable costs during this time equaled $5 per unit.Next year the company is anticipating a 4% increase in total fixed costs and a $1 per unit decrease in variable costs but would like to maintain its current selling price per unit.How many units must the company sell next year to earn $1 million? (Round answer to complete units.)

• A) 119,200
• B) 200,000
• C) 214,560
• D) 268,200
• E) 18,200

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Definitions:

Cash Sales

Transactions where goods or services are purchased and paid for with cash at the time of the sale.

Perpetual Inventory

An inventory management system where inventory quantities and costs are updated continuously with each sale or purchase transaction.

Accounts Payable

Liabilities of a business that represent its obligations to pay off a short-term debt to its creditors or suppliers.

Inventory

The overall quantity of products and resources that a business possesses, which are either for sale or to be utilized in manufacturing.