Partner Industries Sells a Single Product for $50 That Has

question 44

Multiple Choice

Partner Industries sells a single product for $50 that has a variable cost of $30. Fixed costs amount to $5 per unit when anticipated sales targets are met. If the company sells one unit in excess of its break-even volume, profit will be:

• A) $15.
• B) $20.
• C) $50.
• D) an amount that cannot be derived based on the information presented.
• E) an amount other than $15, $20, or $50 and one that can be derived based on the information presented.

---

Definitions:

Merger

The combination of two or more companies into a new entity, often aiming to achieve more efficiency or market share.

Fair Market Value

The price that a willing buyer and a willing seller would agree upon, given both parties have reasonable knowledge of the asset’s particulars.

Purchase Method

An accounting approach used to consolidate the financial statements of a buyer and a target company after an acquisition.