A Company That Makes Optical Computer Input Devices Has Calculated

question 33

Multiple Choice

A company that makes optical computer input devices has calculated their revenue and costs as follows for the most recent fiscal period: Costs:
What is the break-even point in sales dollars?

• A) $362 500.00
• B) $589 666.67
• C) $241 666.67
• D) $870 000.00
• E) $280 333.33

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Definitions:

Variable Overhead

Costs that vary with the level of production output, such as utilities and commissions.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the actual quantity of materials used.

Variable Manufacturing Overhead

This refers to the manufacturing overhead costs that vary with the level of production, such as utilities or indirect materials.

Materials Price Variance

The variance between the standard cost and the actual expense of materials, factored by the number of materials acquired.