Ramser Co Has Total Variable Costs Equal to 40% of Sales

question 32

Multiple Choice

Ramser Co. has total variable costs equal to 40% of sales. Fixed costs are $120,000. What is the breakeven point in units?

• A) 300,000
• B) 200,000
• C) 480,000
• D) Cannot be determined

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Definitions:

Pre-tax Cost

The expense or cost associated with an investment or project before any taxes are deducted.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, indicating the percentage of tax applied to your next dollar of taxable income.

Coupons

The interest payments made to bondholders, typically on an annual or semi-annual basis.