Sunday, June 19, 2011

What are breakeven sales in units using absorption costing if the production units are actually 25,000?

ACCOUNTING

Multiple Choice

Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 20x2 is as follows:



Total fixed manufacturing overhead $180,000

Total other fixed expenses $200,000

Total variable manufacturing expenses $120,000

Total other variable expenses $120,000

Units produced 30,000 units

Budgeted production 30,000 units

Units sold 25,000 units

Selling price $40



What are breakeven sales in units using absorption costing if the production units are actually 25,000?

a. 5,625 units

b. 6,667 units

c. 7,667 units

d. 8,846 units

Click here for the SOLUTION

No comments:

Post a Comment