How Much Does Each Additional Sales Dollar Contribute Toward Profit

question 112

Multiple Choice

How much does each additional sales dollar contribute toward profit for a firm with $5 million break-even level of revenues and $1.5 million in fixed costs including depreciation?

• A) $0.30
• B) $0.33
• C) $0.50
• D) $0.67

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Definitions:

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.

Greatest Good

A concept often associated with utilitarianism, suggesting that actions are right if they benefit the majority, promoting the most happiness or least harm.

Laws

The system of rules that are created and enforced through social or governmental institutions to regulate behavior and maintain order in society.

Monroe Doctrine

A principle of United States foreign policy established in 1823, asserting that any intervention by external powers in the politics of the Americas is a potentially hostile act against the US.