At a Breakeven Point of 300 Units, the Variable Costs

question 114

Multiple Choice

At a breakeven point of 300 units, the variable costs were $600 and the fixed costs were $300. What will the next (i.e., 401st) unit sold contribute to profit before income taxes?

• A) $0
• B) $2
• C) $1
• D) Cannot be determined

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Definitions:

Taxable Income

The portion of one's income that is subject to taxes, determined by subtracting allowable deductions and exemptions from the gross income.

Taxable Income

The amount of an individual's or corporation's income that is subject to taxes, after deductions and exemptions.

Standard Deduction

A fixed amount that reduces the income on which you are taxed, which the IRS allows taxpayers to subtract from their gross income to reduce taxable income.

Joint Return

A tax return filed jointly by a married couple, combining their incomes, deductions, and credits.