A Company Has Total Fixed Cost of $120,000

question 223

Multiple Choice

A company has total fixed cost of $120,000. Its variable cost per unit is $2.00 and its price per unit is $3.50. The break-even point in units is:

• A) 60,000.
• B) 80,000.
• C) 34,286.
• D) 21,818.
• E) Cannot be determined from the information provided.

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Definitions:

Enforceable

Capable of being executed or carried out under the law.

Agreement

A mutual understanding or arrangement between two or more parties, often formalized in a contract, outlining terms and conditions.

Tort

A wrongful act or an infringement of a right leading to civil legal liability.

Contract

An agreement between two or more parties that is binding by law and comes with mutual responsibilities.