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:

Cigars

Typically a tightly rolled bundle of dried and fermented tobacco that is smoked, considered a luxury good in many cultures.

Consumer's Surplus

The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.

Net Increase

The difference resulting from the amount by which something grows or goes up less any decreases.

Units of X

A measure or quantity of a specific good or product, referred to as 'X' in an economic or mathematical context.