Mitchell Company Sells Its Product for $100 Per Unit What Is the Company's Break-Even Point in Units?
A) 1,000

question 61

Multiple Choice

Mitchell Company sells its product for $100 per unit. The company's accountant provided the following cost information: $$\begin{array} { | l | l | } \hline \text { Manufacturing costs } & \$ 25,000 + 45 \% \text { of sales } \\\hline \text { Selling costs } & \$ 15,000 + 20 \% \text { of sales } \\\hline \text { Administrative costs } & \$ 25,000 + 10 \% \text { of sales } \\\hline\end{array}$$ What is the company's break-even point in units?

• A) 1,000
• B) 750
• C) 2,600
• D) 4,000

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Definitions:

Objectivity Concept

An accounting principle that requires financial and accounting information to be independent and based on measurable and verifiable data.

Unit of Measure

A standard quantity used to express a physical quantity, ensuring uniformity in the reporting of financial and operational data.

Business Entity Concept

An accounting principle that treats a business as separate from its owners or shareholders for financial reporting purposes.

Internal Users

Internal users are individuals or groups within an organization who use financial information to make decisions about the operations of the company, such as management and employees.