Product X Sells for $35 Per Unit and Has Related

question 79

Multiple Choice

Product X sells for $35 per unit and has related variable costs of $25 per unit. The fixed costs of producing product X are $65,000 per month. How many units of product X must be sold each month to earn a monthly operating income of $85,000?

• A) 2,833.
• B) 6,000.
• C) 15,000.
• D) 10,000.

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Definitions:

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, often referred to as the owner's claim against the assets.

Total Liabilities

The sum of all financial obligations a company owes to outside parties.

Total Assets

The sum of all resources owned by a company, valued in terms of money, which can be used to produce goods or services or are held for sale.

Income Statement

A financial report that shows a company's revenues and expenses over a specific period, resulting in net profit or loss.