Preston Milled Products Currently Sells a Product with a Variable

question 22

Multiple Choice

Preston Milled Products currently sells a product with a variable cost per unit of $21 and a unit selling price of $40.At the present time,the firm only sells on a cash basis with monthly sales of 2,800 units.The monthly interest rate is 0.5 percent.What is the switch break-even point if the firm switched to a net 30 credit policy? Assume the selling price per unit and the variable costs per unit remain constant.

• A)2,830 units
• B)2,910 units
• C)3,333 units
• D)3,414 units
• E)3,526 units

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Definitions:

Equivalent Measure

A unit of measurement that corresponds to equivalent amounts in different measurement systems.

Milliliters

A metric unit of volume equal to one thousandth of a liter, commonly used to measure liquids in medical, laboratory, and cooking contexts.

Milliliters

A measurement of capacity in the metric system, equivalent to 0.001 liters, frequently utilized for quantifying liquid substances.

Liter

A unit of volume in the metric system, equal to 1,000 cubic centimeters or approximately 0.26 gallons.