At a Break-Even Point of 600 Units Sold, the Variable

question 36

Multiple Choice

At a break-even point of 600 units sold, the variable costs were $600 and the fixed costs were $300. What will the sale of each additional unit contribute to profit before income taxes?

• A) $0
• B) $0.50
• C) $1.00
• D) $1.50

---

Definitions:

Short-term Creditors

refers to entities or individuals that lend money or extend credit for short periods, typically less than a year, including suppliers and banks.

Liquidity

A measure of how easily assets can be converted into cash without significant loss of value, indicating the ability of an entity to meet its short-term obligations.

Price-Earnings Ratio

A measurement that contrasts a firm's stock price with its earnings per share to determine if its shares are valued appropriately.

Dividends

Distributions of earnings to stockholders; an account representing the distribution of a corporation’s earnings to stockholders.