At a Break-Even Point of 400 Units, Variable Costs Were

question 11

Multiple Choice

At a break-even point of 400 units, variable costs were $400 and fixed costs were $200. What will the 401st unit sold contribute to operating profits before income taxes?

• A) $0.50
• B) $1.00
• C) $1.50
• D) $2.00

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Definitions:

American Association of CPAs

A professional organization in the United States that sets ethical standards for Certified Public Accountants and offers training and certification.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed in the business within one year or within the business's operating cycle, whichever is longer.

Current Liabilities

Short-term financial obligations that a company owes and are due within one year.

Total Liabilities

The sum of all financial obligations or debts that a company owes to outside parties.