A Firm Has Operating Profit of $15,000 on Unit Sales

question 13

Multiple Choice

A firm has operating profit of $15,000 on unit sales of 10,000 units. Fixed costs are $30,000. What is the firm's break-even in units?

• A) Less than 6,000 units.
• B) 6,000 units.
• C) More than 6,000 units
• D) There is not enough information to determine the unit break-even point.

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Definitions:

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its owners or shareholders as dividends.

Undistributed Profits

Profits earned by a company that are not paid out as dividends to shareholders but are retained for reinvestment in the business or held as reserves.

R&D Finance

Financial resources allocated for research and development activities in a company or organization.

Retained Earnings

Profits that a company keeps or reinvests in itself rather than distributing to shareholders as dividends.