Nonesuch Company Sells Only One Product at a Regular Price

question 11

Multiple Choice

Nonesuch Company sells only one product at a regular price of $7.50 per unit. Variable expenses are 60 percent of sales and fixed expenses are $30,000. Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales.
What sales dollar level is needed to obtain a before-tax profit of $60,000 when the selling price is $6.00 per unit?

• A)$90,000
• B)$120,000
• C)$72,000
• D)$360,000

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Definitions:

Discretionary Action

Actions that rely on individual judgment and choice in the execution of a duty or the handling of a situation.

Role Conflict

Occurs when an individual faces incompatible demands or expectations from different roles they are required to perform.

Position Power

The authority or influence a person has due to their role or position within an organization or group.

Formal Authority

The power granted to an individual or group through official or legal means within an organization or society.