Company a Has Fixed Expenses of $100,000 and Variable Expenses

question 72

Multiple Choice

Company A has fixed expenses of $100,000 and variable expenses of $50 per unit. Company B has fixed expenses of $200,000 and variable expenses of $25 per unit. The volume of unit sales necessary to produce exactly the same operating income for Company A and Company B is:

• A) 2,500.
• B) 4,000.
• C) 5,000.
• D)7,500.

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Definitions:

Direct Evidence

Evidence that directly proves a fact without the need for any inference or presumption, such as testimony from a witness about what they personally observed.

Circumstantial Evidence

Evidence that relies on an inference to connect it to a conclusion of fact, such as a fingerprint at the scene of a crime, rather than direct evidence like eyewitness testimony.

Existence

The state or fact of being real, present, or in operation.

Circumstantial Evidence

Indirect evidence that implies a fact but does not directly prove it.