If Fixed Costs Are $490,000, the Unit Selling Price Is

question 202

Multiple Choice

If fixed costs are $490,000, the unit selling price is $35, and the unit variable costs are $20, what is the break-even sales (units) if fixed costs are reduced by $40,000?

• A) 32,667 units
• B) 14,000 units
• C) 30,000 units
• D) 24,500 units

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Definitions:

Cash Flow to Creditors

The sum of interest payments and net new borrowings, representing the cash flow from a company to its creditors during a period.

Interest Paid

This represents the amount paid over a period for the use of borrowed money, or the cost of borrowing.

Net New Borrowing

Refers to the total amount of new debt acquired by a company or government, minus any debt that has been repaid during the same period.

Tax Rate

The defined percentage of income from individuals or corporations allocated for taxes.