David Files His Tax Return 45 Days After the Due

question 157

Multiple Choice

David files his tax return 45 days after the due date. Along with the return, David remits a check for $40,000 which is the balance of the tax owed. Disregarding the interest element, David's total failure to file and to pay penalties are:

• A) $400.
• B) $3,600.
• C) $4,000.
• D) $4,400.
• E) None of the above.

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Definitions:

Economic Profit

Economic profit is the difference between total revenue and total costs, including both explicit and implicit costs, measuring the performance exceeding the opportunity costs of resources used.

Fixed Costs

Expenses that do not change with the level of production or business activity within a certain range or period.

Short-Run Marginal Cost Curve

A graph that shows the cost of producing one more unit of a good or service in the short term, when some factors of production are fixed.

Optimal Level

The most efficient, effective, or desirable point or degree in a process, situation, or system.