Dirth Company sells only one product at a regular price of £7.50 per unit. Variable expenses are 60 per cent of sales and fixed expenses are £30,000. Management has decided to decrease the selling price to £6.00 in hopes of increasing its volume of sales. What is the monetary sales level required to break even at the old price of £7.50? Select one: O A. £50,000 O B. £18,000 OC. £12,000 OD. £75,000

Dirth Company sells only one product at a regular price of £7.50 per unit. Variable expenses are 60 per cent of sales and fixed expenses are £30,000. Management has decided to decrease the selling price to £6.00 in hopes of increasing its volume of sales. What is the monetary sales level required to break even at the old price of £7.50? Select one: O A. £50,000 O B. £18,000 OC. £12,000 OD. £75,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Dirth Company sells only one product at a regular price of £7.50 per unit. Variable expenses are 60 per cent of sales
and fixed expenses are £30,000. Management has decided to decrease the selling price to £6.00 in hopes of
increasing its volume of sales.
What is the monetary sales level required to break even at the old price of £7.50?
Select one:
O A. £50,000
O B. £18,000
O C. £12,000
OD. £75,000

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