Casey Company Has Fixed Costs of $1,500,000 and Variable Costs

question 68

Multiple Choice

Casey Company has fixed costs of $1,500,000 and variable costs are 40% of sales. What are the required sales if Casey Company desires net income of $150,000?

• A) $2,750,000
• B) $2,500,000
• C) $4,125,000
• D) $3,750,000

---

Definitions:

Inflation Rates

The percentage increase in the price level of goods and services over a period, reducing purchasing power.

Excess Reserves

Bank reserves that exceed the required minimum amount that financial institutions must hold in reserve against deposit liabilities.

Required Reserves

The minimum amount of reserves that a bank must hold as dictated by central banking regulations, typically a percentage of deposits.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, that lenders charge borrowers for the use of their funds.