A Firm with 60% of Sales Going to Variable Costs,$1

question 95

Multiple Choice

A firm with 60% of sales going to variable costs,$1.5 million fixed costs,and $500,000 depreciation and sales of $3 million.How does the current level of sales compare to the accounting break-even sales level?

• A) Current sales are $2 million below the break-even level.
• B) Current sales are $333,333 below the break-even level.
• C) Current sales are $800,000 below the break-even level.
• D) Current sales exceed the break-even level by $360,000.

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Definitions:

Equation

A mathematical statement asserting the equality of two expressions, typically involving variables.

Midpoint

The point exactly halfway between two endpoints on a line segment.

Line Segment

Part of a line bounded by two distinct end points.

X-intercepts

The points where a graph crosses the x-axis, indicating where the value of \(y\) is zero.