If TechCor Has Fixed Costs of $60,000, Variable Costs of $1.20/unit

question 34

Multiple Choice

If TechCor has fixed costs of $60,000, variable costs of $1.20/unit, a sales price/unit of $7, and depreciation expense of $25,000, what is its cash breakeven in units?

• A) 6,034 units
• B) 11,458 units
• C) 12,375 units
• D) 45,833 units

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Definitions:

Credit Period

The time frame allowed by a seller for a buyer to pay for goods or services, typically expressed in days.

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Allowance Method

An accounting technique used to estimate and account for bad debts or uncollectible accounts receivable.

Bad Debts

Accounts receivable that a company considers uncollectible and writes off as a loss in its financial statements.