Calculate the Accounting Break-Even Point for the Following Firm: Revenues

question 114

Essay

Calculate the accounting break-even point for the following firm: revenues of $700,000, $100,000 fixed costs, $75,000 depreciation, 60 percent variable costs, and a 35 percent tax rate.What happens to the break-even if a trade-off is made which increases fixed costs by $30,000 and decreases variable costs to 55 percent of sales?

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Definitions:

Operant Conditioning

A learning process in which the strength of a behavior is modified by its consequences, such as rewards or punishments.

Extinction

In behavioral psychology, the process through which a conditioned response decreases in frequency and eventually disappears as a result of the conditioned stimulus being presented without reinforcement.

High Steady Rates

Constant and uniform frequencies or levels maintained over a period of time.

Continuous Reinforcement

A learning process in which a behavior is reinforced every time it occurs, leading to rapid learning.