Baines Brothers Manufactures and Sells Two Products, a and Z

question 77

Multiple Choice

Baines Brothers manufactures and sells two products, A and Z in the ratio of 4:2. Product A sells for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500. Compute the number of units of Product Z Baines must sell to break even.

• A) 5,080.
• B) 6,200.
• C) 2,540.
• D) 3,100.
• E) 2,790.

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Definitions:

Financial System

The system that covers the exchange of different goods, assets, or financial instruments among people, companies, or states.

Debt Finance

A method of raising capital through borrowing, which can involve issuing bonds or taking out loans, to be repaid at a future date.

Equity Finance

The method of raising capital by selling company shares to investors, in exchange for ownership interest.

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A financial statement presenting the government's proposed revenues and spending for a financial year.