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Answer the Following Questions Using the Information Below:
Gundagai Company

Question 11

Multiple Choice

Answer the following questions using the information below:
Gundagai Company sells several products.Information of average revenue and costs is as follows:
 Selling price per unit $28.50 Variable costs per unit:  Direct material $5.25 Direct manufacturing labour $1.15 Manufacturing overhead $0.25 Selling costs $1.85 Annual fixed costs $110000\begin{array}{lr}\text { Selling price per unit } & \$ 28.50 \\\text { Variable costs per unit: } & \\\quad \text { Direct material } & \$ 5.25 \\\text { Direct manufacturing labour } & \$ 1.15 \\\text { Manufacturing overhead } & \$ 0.25 \\\quad \text { Selling costs } & \$ 1.85 \\\text { Annual fixed costs } & \$ 110000\end{array}
-The number of units that Gundagai must sell each year to break even is:


A) 1000 units.
B) 4000 units.
C) 5500 units.
D) indeterminable.

Correct Answer:

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