If the Sales Price Per Unit Is $100, the Unit

question 117

Multiple Choice

If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs are $150,000, then the break- even volume in dollar sales rounded to the nearest whole dollar is:

• A) $600,000
• B) $150,000
• C) $1,500
• D) $200,000

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Definitions:

Tax Rate

The tax rate is the percentage at which an individual or corporation is taxed, which can vary depending on income level, type of income, or jurisdiction.

Present Value

The contemporary valuation of a future sum of money or sequence of cash inflows, considering a certain rate of return.

Cost of Capital

The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.

Net Investment

The total amount spent on purchasing new capital assets minus depreciation on existing assets, indicating the actual increase in a company's capital stock.