Beacon Inc

question 197

Multiple Choice

Beacon Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $350000 loss in the year of disposal. The loss on disposal of the segment was $150000. If the tax rate is 30% and income before income taxes was $2300000

• A) the income tax expense on the income before discontinued operations is $540000.
• B) the income from continuing operations is $1610000.
• C) net income is $1800000.
• D) the losses from discontinued operations are reported net of income taxes at $150000.

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Definitions:

Long Run Average Cost Curve

A graphical representation that shows the lowest average cost at which any given level of output can be produced in the long run.

Decreasing-cost Industry

An industry where the costs of production decrease as the industry grows due to economies of scale.

Long-run Equilibrium

A state in which all factors of production and outputs are fully adjusted to economic conditions, leading to stable prices and optimal resource allocation.

Market Price

The current price at which an asset or service can be bought or sold in a particular market.