During 2014, Li & Fung Corporation Earned Revenue of HK$9,225,000

question 170

Multiple Choice

During 2014, Li & Fung Corporation earned revenue of HK$9,225,000, incurred expenses of expenses of HK$6,945,000, and paid dividends of HK$630,000. Net income for 2014 is

• A) HK$1,650,000.
• B) HK$2,280,000.
• C) HK$8,595,000.
• D) HK$9,225,000.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Those costs, primarily labor and materials, that vary with production volume.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Market Competitiveness

The ability of a company or product to compete effectively in the marketplace based on factors like price, quality, and innovation.