A Manufacturer of 24-Hr Variable Timers, Has a Monthly Fixed

question 92

Multiple Choice

A manufacturer of 24-hr variable timers, has a monthly fixed cost of $56,000 and a production cost of $9 for each timer manufactured. The units sell for $16 each. Find the break-even point algebraically.

• A) break-even production 16,000 units; break-even revenue $1,280,000
• B) break-even production 16,000 units; break-even revenue $128,000
• C) break-even production 8,000 units; break-even revenue $1,280,000
• D) break-even production 8,000 units; break-even revenue $128,000

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Definitions:

Fixed Manufacturing Overhead

The consistent, periodic expenses that a manufacturing company incurs, regardless of the level of production, such as equipment depreciation and facility rent.

Variable Manufacturing Cost

Costs that vary directly with the level of production output, such as materials and direct labor.

Unit Product Cost

The overall expense incurred in manufacturing a single product unit, encompassing material, workforce, and indirect costs.

Variable Selling Cost

Costs that change in proportion to the volume of goods sold, such as commissions or shipping charges.