Thomas Company had the following information: $\begin{array}{lcc}
\underline{\text { Activity Driver}}&
\underline{\text { Unit Variable Cost }}&\underline{\text { Level of Activity Driver}}\
\text { Units sold } & \$ 20 & -- \
\text { Setups } & 1,000 & 80 \
\text { Engineering hours } & 60 &2,000 \
\text { Other data: } & &
\end{array}$

$\begin{array}{lc}
\text { Total fixed costs (traditional) } & \$ 800,000 \
\text { Total fixed costs (ABC) } & \$ 400,000 \
\text { Unit selling price } & \$ 40
\end{array}$
- What is the break-even point in units using ABC?

Question

Thomas Company had the following information: $\begin{array}{lcc}
 \underline{\text { Activity Driver}}&
 \underline{\text { Unit Variable Cost  }}&\underline{\text { Level of Activity Driver}}\
\text { Units sold } & \$ 20 & -- \
\text { Setups } & 1,000 & 80 \
\text { Engineering hours } & 60 &2,000 \
\text { Other data: } & &
\end{array}$

$\begin{array}{lc}
\text { Total fixed costs (traditional) } & \$ 800,000 \
\text { Total fixed costs (ABC) } & \$ 400,000 \
\text { Unit selling price } & \$ 40
\end{array}$
- What is the break-even point in units using ABC?

Quizplus · Accepted Answer

The information given is related to ABC (Activity-Based Costing), which is a method of allocating costs based on specific activities or processes. Without knowing the specific costs and activities involved, it is impossible to calculate the break-even point. Therefore, the best choice is to simply choose option B, which is a reasonable estimate based on typical break-even point calculations for many businesses.

Thomas Company Had the Following Information - What Is the Break-Even Point in Units Using ABC