Applied using a predetermined overhead rate

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Reference no: EM13746397

Trenton and Company makes a single product requiring $50 of direct materials. Manufacturing Overhead is applied using a predetermined overhead rate of 150% of direct labor cost. One third of manufacturing overhead is fixed. There is no under or over applied overhead, and the company has no beginning or ending inventory. The company reports the following results for August :

Number of Units Sold : 8,000

Selling Price Per Unit : $300

Manufacturing Cost Per Unit : $200

Variable Selling and Adminstrative Expenses Per Unit : $45

Total Fixed Selling and Adminstrative Expenses : $290,000

Question : How many units can sales go down before the company incurs a loss?

A) 1,765 B) 5,100 C) 2,700 D) 6,235 E) None of above

Reference no: EM13746397

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