Reynold's Grocery Has Fixed Costs of $350,000,the Unit Selling Price

question 206

Multiple Choice

Reynold's Grocery has fixed costs of $350,000,the unit selling price is $29,and the unit variable costs are $20.What is the break-even sales (units) if the variable costs are decreased by $4?

• A) 26,923 units
• B) 12,069 units
• C) 21,875 units
• D) 38,889 units

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Definitions:

Forward Contract

is a non-standardized contract between two parties to buy or sell an asset at a specified future date for a price agreed upon today.

Settlement Date

The date on which a trade is finalized, and the buyer must make payment and the seller must deliver the asset.

Option Contract

A financial contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a certain period.

Right

In finance, the prerogative to buy or sell a security under specific conditions, often associated with options.