Use the Information Below to Answer the Following Question(s)

question 245

Multiple Choice

Use the information below to answer the following question(s) .
The Olson Company has a predicted operating income of $100,000. Their total variable expenses are $36,000 and their total fixed expenses are $24,000. They have a unit contribution margin of $10.
-If the Olson Company fixed expenses increase to $40,000 then their break-even in sales units will be

• A) 10,400.
• B) 6,000.
• C) 17,600.
• D) 4,000.

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Definitions:

Profits

The net income received by a company after deducting all expenses, taxes, and costs.

Unrealized Gain

Profit that has been made on paper from investments but has not yet been converted to cash by selling the asset.

Commercial Substance

A characteristic of a business transaction that leads to a change in the cash flows of the entity, indicating that the change has a significant economic effect.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.