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Ok so I am studying for BEC and I am not sure if my brain is fried to the point that I am seeing things that really don’t exist. Anybody out there, feel free to work the following question and please share your answer with me.
A ceramics manufacturer sold cups last year for 7.50 each. Variable costs of manufacturing were 2.25/unit. The company needed to sell 20,000 units to break even. Net income was 5,040. This year the company expects the price per cup to be 9.00; variable manufacturing costs to increase by 33.3%; and fixed costs to increase by 10%. How many cups does the company need to sell to break even?
A) 17,111
B) 17,500
C) 19,250
D) 25,667
Upon working and re-working this question, I get 38,500 every time. Becker gets 19,250 and their explanation makes no sense because they claim that $115,500/3 = 19,250 . . . anybody with a calculator knows differently.
I’m just looking for confirmation that I am not going certifiably insane over this stupid test. Thanks!
REG 94, AUD 87, FAR (10/8), BEC (11/24)
"Do today what others won't, so tomorrow you can do what others can't."
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