How Many Total Dollars of Sales Must BAC Company Sell

question 122

Multiple Choice

How many total dollars of sales must BAC Company sell to break even if the selling price per unit is $8.50, variable costs are $4.00 per unit, and fixed costs are $9,000?

• A) $4,000
• B) $8,500
• C) $9,000
• D) $17,000

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Definitions:

Variable Expenses

Expenditures that fluctuate in tandem with operational activity levels, including costs like utilities and commissions.

Net Income

The total profit of a company after all expenses, including taxes and operating expenses, are subtracted from total revenue.

Break-Even Point

The point at which the amount produced or sold results in total income matching total costs, leading to neither a profit nor a loss.

Net Loss

The amount by which expenses exceed revenues over a specific period, indicating a negative financial performance.