Nelson Manufacturing Has the Following Data: Variable Costs Are 60

question 108

Multiple Choice

Nelson Manufacturing has the following data: Variable costs are 60% of the unit selling price.
The contribution margin ratio is 40%.
The contribution margin per unit is $500.
The fixed costs are $300,000.
Which of the following does not express the break-even point?

• A)$300,000 + .60X = X
• B)$300,000 + .40X = X
• C)$300,000 ÷ $500 = X
• D)$300,000 ÷ .40 = X

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved, leading to a mismatch between supply and demand.

Tax

A non-negotiable pecuniary charge or alternate levy directed at a taxpayer by a government authority to underwrite the costs of government functioning and various public funding requirements.

Good

An item or product that can be used to satisfy a want or need.

Tax Revenue

The income that a government receives from taxes imposed on individuals and businesses.