Kelvin CoProduces and Sells Socks

question 64

Multiple Choice

Kelvin Co.produces and sells socks.Variable costs are $4 per pair,and fixed costs for the year total $90,000.The selling price is $6 per pair.The sales units required to make an after-tax profit of $15,000,given an income tax rate of 40 percent,are:

• A)47,500 units.
• B)56,500 units.
• C)65,661units.
• D)60,000 units.
• E)57,500 units.

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Definitions:

Repaid

Refers to the act of paying back money that was borrowed from an individual, bank, or financial institution.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.

Owner's Equity

The total assets of a business minus its total liabilities; represents the ownership interest of the shareholders or owner(s).

Required Assets

Assets that are necessary for a business or individual to achieve its goals, including tangible and intangible resources.