Problem-
Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows:
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Kilihea Corporation
Income Statement
For the month ended July 31
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Sales (14,500 units)
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$710,500
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Cost of goods sold
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443,700
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Gross margin
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266,800
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Selling and administrative expenses:
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Fixed
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130,500
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Variable
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72,500
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Total selling and administrative expense
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203,000
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Net operating income
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$ 63,800
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The company's variable production costs are $22.60 per unit and its fixed manufacturing overhead totals $122,600 per month. The break-even point in units for the month under variable costing is
a. 8,177 units
b. 10,077 units
c. 11,827 units
d. 8,977 units
Additional Requirement-
The problem belongs to Basic Accounting and it discusses about calculation of break-even point in units for the month.