If Fixed Costs Are $600,000 and the Unit Contribution Margin

question 85

Multiple Choice

If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000?

• A) 17,250
• B) 15,000
• C) 8,333
• D) 9,667

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Definitions:

Financial Statements

Written records that convey the business activities and the financial performance of a company.

GAAP

Generally Accepted Accounting Principles, which are a set of rules and standards used in the United States for financial reporting.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.

Inventory

The raw materials, work-in-process products, and finished goods that a company holds for the purpose of sale in the near future.