The Following Data Pertain to the Three Products Produced by Rona

question 57

Multiple Choice

The following data pertain to the three products produced by Rona Corporation: $\begin{array}{lrrr}&\underline{A} & \underline{B} &\underline{C}\\\text { Sales price per unit } & \$ 5.00 & \$ 7.00 & \$ 6.00 \\\text { Variable costs per unit } & \underline{4.00} & \underline{5.00} & \underline{3.00} \\\text { Contribution margin per unit } & \underline{\$ 1.00} & \underline{\underline{\$ 2.00}} & \underline{\underline{\$ 3.00}}\end{array}$
Fixed costs are $90,000 per month. Of all units sold, 60% are Product A, 30% are Product B, and 10% are Product C.
What is the monthly break-even point for total units?

• A) 36,000 units
• B) 45,000 units
• C) 60,000 units
• D) 180,000 units

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Definitions:

Average Operating Assets

Average operating assets represent the average value of the assets used in the normal operations of a business within a specific period, often used in calculating return on investment metrics.

Minimum Required Rate Of Return

The lowest return that investors or managers expect to receive on an investment to make it worthwhile.

Operating Expenses

Ongoing expenses related to the operation of a business, excluding the costs of goods sold.

Average Operating Assets

The average value of the assets used by a business in its operational activities over a period of time, used to measure efficiency and profitability.