Acme Dynamite Has $2000 of Variable Costs and $500 of Fixed

question 67

Multiple Choice

Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25.
Profit at this output level is

• A)$6,250
• B)$5,750
• C)$4,250
• D)$3,750

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Definitions:

Sales Revenue

Financial income derived from transactions involving the sale of products or provision of services over an interval of time.

Gross Profit Rate

The ratio of gross profit to total sales, indicating the percentage of revenue that exceeds the cost of goods sold.

Net Income

The amount of earnings left after all expenses, including taxes and operating costs, have been subtracted from total revenue; a measure of company profitability.

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding direct production costs but including items like rent, utilities, and administrative salaries.