[The Following Information Applies to the Questions Displayed Below

question 87

Multiple Choice

[The following information applies to the questions displayed below.]
Accents Associates sells only one product,with a current selling price of $70 per unit.Variable costs are 40% of this selling price,and fixed costs are $12,000 per month.Management has decided to reduce the selling price to $65 per unit in an effort to increase sales.Assume that the cost of the product and fixed operating expenses are not changed by this reduction in selling price.
-At the current selling price of $70 per unit,the dollar volume of sales per month necessary for Accents to break-even is:

• A)$12,000.
• B)$20,000.
• C)$30,000.
• D)Some other amount.

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Definitions:

Temporary Account

An account used to collect balances over an accounting period that are then transferred to a permanent account.

Stockholders' Equity

The remaining interest in a company's assets after all liabilities are subtracted, indicating ownership.

Real Accounts

Accounts that represent assets, liabilities, and equity, remaining open to accumulate financial information over several periods.

Liabilities

Financial obligations or debts that an entity owes to others, which are expected to be settled over time through the transfer of economic benefits.