Using the Following Information, Calculate Net Profit Before Tax

question 42

Multiple Choice

Using the following information, calculate net profit before tax.

• A) $50 000.
• B) $100 000.
• C) $180 000.
• D) None of the above.

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Definitions:

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business.

Financial Break-Even

The point at which total revenues are equal to total fixed and variable costs, resulting in a net income of zero.

Soft Rationing

Internal limitations set by a company on the amount of funds allocated for new investments or projects.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, demonstrating the proportion of fixed versus variable costs a company has.