Accounting Multiple Choice Question – 14 December 2021

The following information relates to a product:

• fixed costs – £72,000
• desired profit – £30,000
• selling price per unit – £10
• variable cost per unit – £4

How many units must be produced and sold to cover fixed costs and make the desired profit?

Select ONE answer:

1. 12,000 units
2. 17,000 units
3. 18,000 units
4. 25,500 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct ==> £72K + £30k = £102k / (£10 – £4) ==> 17,000 units
3. Not correct
4. Not correct

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