A Product Sells for $125,variable Costs Are $80,and Fixed Costs

question 12

Multiple Choice

A product sells for $125,variable costs are $80,and fixed costs are $45,000.If the selling price can be increased by 20% with a similar increase in variable costs,how many fewer units would have to be sold to earn $300,000? (Round the answer to the nearest unit. )

• A)5,595 units
• B)7,667 units
• C)1,278 units
• D)6,389 units

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Definitions:

Financial Statement

A certified summary of all financial dealings and the fiscal posture of a business entity, a private individual, or any other party.

Contra-Asset Accounts

Accounts on a balance sheet that have a balance opposite to the normal balance of an associated account, used to lower the value of the associated assets (e.g., accumulated depreciation).

Sales Discounts

A reduction in the price of goods or services sold, offered by the seller as an incentive to buyers.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business.