Delta Company sells mini-flash drives. The selling price is $10 each and the variable costs are $8. If fixed costs are $3,000, how much in sales dollars must Delta have to break even?

Delta Company sells mini-flash drives. The selling price is $10 each and the variable costs are $8. If fixed costs are $3,000, how much in sales dollars must Delta have to break even?

multiple choice

    $1,500
    $15,000 Correct
    $30,000
    $24,000

Explanation

Knowledge Check 01
 
Break-even point in sales dollars = [Fixed costs of $3,000 ÷ Contribution margin ratio of 20% (or (Selling price per unit of $10 − Variable cost per unit of $8) ÷ Selling price per unit of $10) = $15,000.
 

The break-even point is the sales level at which:

multiple choice

    total sales equals total costs Correct
    cost of goods sold equals other expenses
    total sales equals variable costs
    total sales equals fixed costs

Explanation

Knowledge Check 01
 
The break-even point is the sales level at which total sales equal total costs resulting in zero income.
 

Which of the following methods to is the most accurate?

multiple choice

    Scatter diagram
    High-low method
    Regression Correct
    None of the methods

Explanation

Knowledge Check 01
 
Regression uses more data and is the most accurate.
 

 Regression is a statistical method for identifying _____ behavior.

multiple choice

    sales
    volume
    cost Correct
    expense

Explanation

Knowledge Check 01
 
Regression is a statistical method for identifying cost behavior.