Strayer Has a Break-Even Point of 120,000 Units

question 27

Multiple Choice

Strayer has a break-even point of 120,000 units. If the firm's sole product sells for $40 and fixed costs total $480,000, the variable cost per unit must be:

• A) $4.
• B) $36.
• C) $44.
• D) an amount that cannot be derived based on the information presented.
• E) an amount other than $4, $36 or $44, but one that can be derived based on the information presented.

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Definitions:

Neutral Third Party

An unbiased, independent individual or group engaged to help resolve disputes, negotiate agreements, or oversee transactions.

Deposit

A sum of money placed in an account or with a third party as a security for the performance of an obligation or the purchase of something.

Tenancy by the Entirety

A form of joint property ownership reserved for married couples, where each spouse has an equal and undivided interest in the property.

Co-ownership

A legal arrangement where two or more individuals have ownership rights in a property or asset.