If Fixed Costs Are $500,000, the Unit Selling Price Is

question 54

Multiple Choice

If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, what is the break-even sales (units) if fixed costs are increased by $80,000?

• A) 10,545 units
• B) 19,333 units
• C) 23,200 units
• D) 25,000 units

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Definitions:

Resale

Resale refers to the process of selling a previously purchased product, generally used or surplus items, to another buyer.

Financial Accounting

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.

Business

An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.

Senior Executives

High-ranking employees in a business who are responsible for making major corporate decisions, usually part of the company’s top management.