Ms. Sophia Jones, 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 2017 is as follows:

What are breakeven sales in units using absorption costing? (Round any intermediary calculations to the nearest cent and your final answer up to the next whole unit.)
A) 5,321 units
B) 5,393 units
C) 6,617 units
D) 11,350 units

Question

Ms. Sophia Jones, 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 2017 is as follows:

What are breakeven sales in units using absorption costing? (Round any intermediary calculations to the nearest cent and your final answer up to the next whole unit.)
A) 5,321 units 
B) 5,393 units 
C) 6,617 units 
D) 11,350 units

Quizplus · Accepted Answer

Total fixed costs: $180,000 + $204,000 = $384,000
Breakeven units N = 11ea1398_f0a2_d006_a1e4_1ff82fed3f0e_TB3027_00 
N = (384,000 + 3.00N - 180,000)/33.83
33.83N = 204,000 + 3.00N
(33.83- 3.00)N = 204,000
N = 6,617 units

Ms Sophia Jones, the Company President, Has Heard That There