Fixed Costs Including Depreciation Have Increased at Leverage, Inc

question 115

Multiple Choice

Fixed costs including depreciation have increased at Leverage, Inc.from $4 million to $6 million in an effort to reduce variable costs.What must the new variable-cost percentage be to leave break-even at $20 million?

• A)60 percent
• B)65 percent
• C)70 percent
• D)75 percent

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Definitions:

Goodwill

Goodwill in business refers to the intangible asset that arises when a company acquires another entity at a price above its fair market value, reflecting the value of the company's brand, customer base, and other non-physical assets.

Incentives

Motivations or rewards designed to encourage specific actions or behaviors.

Style and Tone

The manner of expression in writing or speech, reflecting the author's attitude and personality through the choice of words and sentence structure.

Grammar

The system and structure of a language, including its rules and conventions, governing the composition of phrases, clauses, and sentences.