Horton and Associates Produces Two Products Named BigBlast and LittleBlast

question 92

Multiple Choice

Horton and Associates produces two products named BigBlast and LittleBlast. Last month 4,000 units of BigBlast and 1,000 units of LittleBlast were produced and sold. Following are average prices and costs for last month: BigBlast LittleBlast
Selling price $100 $200
Direct materials (25) (75)
Direct labour (15) (35)
Variable overhead (5) (30)
Product line fixed costs (10) (40)
Corporate fixed costs (25) (25)
Average margin per unit $ 20 $( 5)
The production lines for both products are highly automated, so large changes in production cause very little change in total direct labour costs. Workers who are classified as direct labour monitor the production line and are permanent employees who regularly work 40 hours per week. All costs other than "corporate fixed costs" listed under each product line could be avoided if the product line were dropped.
What is the breakeven sales volume (in units) for BigBlast? (In other words, what is the sales volume at which Horton should be financially indifferent between dropping and keeping BigBlast?) :

• A)728 units
• B)2,545 units
• C)1,084 units
• D)790 units

Recognize and explain the environmental impacts of mining activities.

Discuss the importance and implications of material substitution in industries.

Understand different conflict resolution styles and their implications.

Comprehend the importance of communication skills in preventing conflict escalation.

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Definitions:

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Similarity Error

A bias in decision making where individuals favor others who are similar to themselves in some way, possibly overlooking merit.

Interviewer

A person who asks questions in a conversation, research study, or selection process typically for the purposes of gathering information, assessing qualifications, or both.

Job Candidate

An individual who applies for or is being considered for an employment position within a company or organization.