Kelvin CoProduces and Sells Socks

question 53

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 dollars required to make an after-tax profit of $15,000,given an income tax rate of 40 percent,are calculated to be:

• A)$336,000.
• B)$339,000.
• C)$342,000.
• D)$360,000.
• E)$345,000.

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Definitions:

Upward Sloping Term Structure

A situation in the bond market where longer-term debt securities yield higher returns than shorter-term ones, indicative of normal market conditions.

Interest Rates

The amount charged by lenders as a percentage of the principal, which borrowers pay for the use of assets.

Nominal Interest Rate

The stated interest rate of a financial product, not adjusting for inflation, representing the actual rate charged by lenders to borrowers.