COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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PT Kim has a total fixed cost of $150,000 and a variable cost of $9 per unit. If the selling price per unit is $12, what is the break-even sales for the firm?
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40.000 Unit
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45.000 Unit
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50.000 Unit
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60.000 Unit
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Explanation:
Detailed explanation-1: -To calculate the break-even point in units use the formula: Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales dollars using the formula: Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin.
Detailed explanation-2: -What is the selling price per unit if break even point is 12000 units? ₹ 5. The new selling price should be ₹100+5 =₹105.
Detailed explanation-3: -Break-even Sales = Total Fixed Costs / (Contribution Margin) Contribution Margin = 1-(Variable Costs / Revenues)
There is 1 question to complete.