MasterCracked Manufacturing Has After-Tax Profits That Total $725,000

question 71

Multiple Choice

MasterCracked Manufacturing has after-tax profits that total $725,000.If the firm has 250,000 shares, what is the amount of earnings per share?

• A)$1.25
• B)$2
• C)$2.90
• D)$2.50
• E)It is impossible to calculate earnings per share with this information.

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Definitions:

Average Total Cost

The total cost of production (fixed and variable costs) divided by the total output or quantity produced.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance payments.

Marginal Costs

Marginal costs are the change in total costs that arise when the quantity produced is incremented by one unit, essentially the cost of producing one more unit of a good.

Average Variable Costs

Costs that change with the level of output, averaged over the total number of units produced.