Refer to the Scenario Below to Answer the Following Questions

question 64

Multiple Choice

Refer to the scenario below to answer the following questions.
Breakeven Analysis at MRI (Scenario)
Mike has just been hired as a sales manager at Mobile Research Inc. (MRI) , makers of the popular Blueberry wireless phone. At his first management briefing, Mike is informed that the company is losing money, despite the immense popularity of the Blueberry phone. He learns that the company is facing intense competition from its main rival, Mandarin Communications, makers of the M-Phone. The M-Phone has the same popular features as the Blueberry and sells for $40 less. When Mike asked about the cost structure for the Blueberry he was informed that the selling price is $200, variable costs are $120, and total fixed costs are $800,000 per month.
-Mike calculated the current breakeven point for the Blueberry to be __________ units per month.

• A) 8,000
• B) 10,000
• C) 12,000
• D) 15,000
• E) 20,000

---

Definitions:

Income Statement

A financial document that reports a company's financial performance over a specific period, detailing revenues, expenses, and net income.

Statement of Cash Flows

An account that explains how fluctuations in balance sheet items and earnings impact cash and its equivalents, divided into sections for operating, investment, and financial activities.

Cash Dividend Payments

Cash dividend payments are distributions of a company's earnings to its shareholders as decided by the company's board of directors.

Income From Operations

Income from operations is a measure of the profitability of a company's core business activities, excluding non-operating income and expenses.