Phillips & Company produces educational software. Its unit cost structure, based upon an anticipated production volume of 150,000 units, is as follows.
The marketing department has estimated sales for the coming year at 175,000 units, which is within the relevant range of Phillips's cost structure. Phillips's breakeven volume (in units) and anticipated operating income for the coming year would amount to:
A) 82,500 units and $7,875,000 of operating income.
B) 82,500 units and $9,250,000 of operating income.
C) 96,250 units and $3,543,750 of operating income.
D) 96,250 units and $7,875,000 of operating income.

Question

Phillips & Company produces educational software. Its unit cost structure, based upon an anticipated production volume of 150,000 units, is as follows.
 The marketing department has estimated sales for the coming year at 175,000 units, which is within the relevant range of Phillips's cost structure. Phillips's breakeven volume (in units) and anticipated operating income for the coming year would amount to:
A) 82,500 units and $7,875,000 of operating income. 
B) 82,500 units and $9,250,000 of operating income. 
C) 96,250 units and $3,543,750 of operating income. 
D) 96,250 units and $7,875,000 of operating income.

Quizplus · Accepted Answer

The Answer of  Phillips & Company produces educational software. Its unit cost structure, based upon an anticipated production volume of 150,000 units, is as follows.
 The marketing department has estimated sales for the coming year at 175,000 units, which is within the relevant range of Phillips's cost structure. Phillips's breakeven volume (in units) and anticipated operating income for the coming year would amount to:
A) 82,500 units and $7,875,000 of operating income. 
B) 82,500 units and $9,250,000 of operating income. 
C) 96,250 units and $3,543,750 of operating income. 
D) 96,250 units and $7,875,000 of operating income.

Phillips & Company Produces Educational Software