Suppose a Firm Produced 500 Units of Output but Sold

question 36

Multiple Choice

Suppose a firm produced 500 units of output but sold only 400 of the units it produced. The average cost of production for each unit of output produced was $100. Each of the 400 units sold were sold for a price of $80. The total revenue of this firm would be:

• A) $50 000
• B) $40 000
• C) $32 000
• D) -$8 000

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Definitions:

Tax Rate

The rate at which income is taxed for a person or a business entity.

GAAP

Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures used in the United States.

Income Statement Information

Income Statement Information includes the revenues, expenses, and profits or losses of a company over a specified period, depicting its financial performance.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, typically a fiscal quarter or year, resulting in a net profit or loss.