A Company Uses Cost-Volume-Profit Analysis to Evaluate a New Product

Multiple Choice

A company uses cost-volume-profit analysis to evaluate a new product. The total fixed costs of production per year are $160,000. The unit variable cost is $50. Which one of the following combinations of unit selling price and breakeven number of units sold per year is correct?

A) $50 selling price and 3,200 breakeven number of units.
B) $100 selling price and 1,600 breakeven number of units.
C) $25 selling price and 6,400 breakeven number of units.
D) $70 selling price and 8,000 breakeven number of units.