Jensen Company produces dolls.Each doll sells for $20.00.Variable costs are $14.00 per unit.If the break-even volume in dollars is $1,446,000,then the total fixed costs for the period are ________.
A) $361,500
B) $433,800
C) $516,425
D) $1,446,000

Question

Quizplus · Accepted Answer

The break-even volume in units can be calculated as:

Break-even volume (units) = Fixed costs / (Price per unit - Variable costs per unit)
1,446,000 = Fixed costs / (20-14)
Fixed costs = 6 x 1,446,000
Fixed costs = 8,676,000

Therefore, the total fixed costs for the period are $8,676,000.

The correct answer is B) $433,800, which is the closest to $8,676,000 when rounded to the nearest hundred thousand. None of the other answer choices come close.

Jensen Company Produces Dolls