A Company with Sales of $100,000,variable Costs of $70,000,and Fixed

question 60

True/False

A company with sales of $100,000,variable costs of $70,000,and fixed costs of $50,000 will reach its break-even point if sales are increased by $20,000.

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Definitions:

Section 1231 Gain

A gain from the sale or exchange of property used in a business, subject to favorable tax treatment under Section 1231 of the U.S. tax code.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

AGI

Adjusted Gross Income is a measure of income calculated from your gross income and used to determine how much of your income is taxable.

Long-term Capital Losses

Financial losses realized from the sale of assets held for more than a year, which can be used to offset capital gains for tax purposes.