Question
Narchie sells a single product for $40. Variable costs are 80% of the selling price, and the company has fixed costs that amount to $152,000.
Narchie sells a single product for $40. Variable costs are 80% of the selling price, and the company has fixed costs that amount to $152,000. Current sales total 16,000 units.
1. Narchie:
will break-even by selling 999,000 units.
will break-even by selling 19,000 units.
will break-even by selling 7,000 units.
will break-even by selling 12,333 units.
cannot break-even because it loses money on every unit sold.
2.After the break -even point each unit that Narchie sells will:
decrease profit by $10.
increase profit by $8.
increase profit by $32.
increase profit by some other amount.
increase profit by $40.
3.In order to produce a target profit of $28,000, Narchie's dollar sales must total:
$900,000.
$19,560.
an amount other than those above.
$22,500.
$845,000.
4.If Narchie sells 22,500 units, its safety margin will be:
$840,000.
$280,000.
$140,000.
an amount other than those above.
$700,000.
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