Pascal, Inc

question 154

Multiple Choice

Pascal, Inc.is planning to sell 800,000 units for $1.50 per unit.The contribution margin ratio is 20%.If Pascal will break even at this level of sales, what are the fixed costs?

• A)$240,000.
• B)$560,000.
• C)$800,000.
• D)$960,000.

Understand the concepts of neutral and nonneutral taxes and their implications on economic decisions.

Grasp the principle of second best and how it applies to taxation policies.

Recognize the influence of tax elasticity on tax distortion and excess burden.

Identify the characteristics of an optimal taxation system.

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Definitions:

Break Even

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business.

Capacity Alternatives

Different options or strategies a business may consider to adjust or increase its capacity to meet demand.

Market Acceptance

The degree to which a new product, service, or business model is embraced by potential customers and the market at large.