When Sales Are $2,000, the Contribution Margin Is $1,200 and a Pre-Tax

question 19

Multiple Choice

When sales are $2,000, the contribution margin is $1,200 and a pre-tax loss of $120 occurs. What is the breakeven point in dollars?

• A) $2,200
• B) $1,100
• C) $1,320
• D) $1,750

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Definitions:

Ownership

The state or fact of legal possession and control over property, which includes the rights to use, sell, or lease it.

Deferred Income Tax Asset

A tax asset that reflects a company's ability to reduce future tax liability due to deductible temporary differences.

Consolidated Income Tax Return

A tax document filed by a parent company encompassing all of its subsidiaries, combining their financial statements for tax purposes.

Tax Rate

The percentage at which an individual or corporation is taxed. The tax rate can vary depending on income level, type of income, or type of goods.