Toys-4-U Manufactures a Toy That It Sells for $30 Each

question 48

Essay

Toys-4-U manufactures a toy that it sells for $30 each. The variable cost per toy is $10 and the fixed costs for this product line are $100,000 per year.
a) What is the break-even point in units?
b) What is the break-even sales revenue?

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Definitions:

Demand

A strong request for something to be given or done, often under the threat of consequences for non-compliance.

Board Of Directors

A group of individuals elected to represent shareholders and make decisions on major company issues.

Merger

In corporation law, traditionally, a transaction by which one corporation acquires another corporation, with the acquiring corporation being owned by the shareholders of both corporations and the acquired corporation going out of existence. Today, loosely applied to any negotiated acquisition of one corporation by another.

Remains Liable

Continues to be legally responsible or obligated.