Organizer Company Has Fixed Costs of $200,000 and Variable Costs

question 83

Multiple Choice

Organizer Company has fixed costs of $200,000 and variable costs are 60% of sales.How much will Organizer Company report as sales when its net income equals $20,000?

• A)$550,000
• B)$366,667
• C)$520,000
• D)$132,000

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Definitions:

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs, indicating a return above the firm's opportunity costs.

Average Rate

The mean value of a set of rates or percentages, calculated as the sum of all rates divided by the number of rates.

Above Average Profits

Earnings that surpass the norm or average level within a particular industry or market.

Perfectly Elastic Demand

A market situation where demand for a product can drastically change to infinity with the slightest change in its price.