Watson Limited Has the Following Cost Estimates: Variable Cost Per

question 28

Multiple Choice

Watson Limited has the following cost estimates: variable cost per unit is $22, total fixed costs are $64 000 and the projected sales price is $30 each. The new accountant suggests that fixed costs can be reduced by $6 000. If so, how many units must be sold to produce a profit of $80 000?

• A) 18 000
• B) 18 750
• C) 17 250
• D) 10 000

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Definitions:

Years of Schooling

The total number of years that an individual has spent in formal education.

Inductive Reasoning

Reasoning that involves drawing conclusions that are suggested but are not necessarily true.

Deductive Reasoning

Drawing conclusions from only the given premises.

Fourth Grade

Refers to the fourth year of formal education in most primary education systems, typically involving students aged 9 to 10 years.