Conan Company Has Total Fixed Costs of $112,000

question 68

Multiple Choice

Conan Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Conan Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level?

• A) 1,120.
• B) 8,214.
• C) 11,200.
• D) 12,320.
• E) 14,080.

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Definitions:

Temporal Method

An accounting technique used for currency translation that uses exchange rates based on the time assets and liabilities are acquired or incurred.

Functional Currency

The currency of the primary economic environment in which an entity operates and generates cash flows.

Goods Sold

The total quantity or value of products that have been purchased by customers within a given period.

Accounting Exposure

The risk that a company's financial statements can be affected by changes in exchange rates, influencing the reported earnings and financial position.