The Following Information Pertains to Mercury Company's Cost-Volume-Profit Relationships How Much Will Be Contributed to Profit Before Taxes by

question 25

Multiple Choice

The following information pertains to Mercury Company's cost-volume-profit relationships: $\begin{array}{ll}\text { Break-ever point in units sold } & 1,000 \\\text { Variable costs per unit } & \$ 500 \\\text { Total fixed costs } & \$ 150,000\end{array}$ How much will be contributed to profit before taxes by the 1,001st unit sold?

• A)$650
• B)$500
• C)$150
• D)$0

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Definitions:

Transfer Payments

Payments made by the government to individuals through various social benefit programs, without the government receiving any goods or services in return.

Government Purchases

Expenditures by the government for goods and services that directly satisfy public consumption or are invested in public infrastructure.

Taxes

Taxes are compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Fiscal Policy

Government adjustments in spending levels and tax rates to monitor and influence a nation's economy.