Variable Expenses for Alpha Corporation Are 40% of Sales

question 85

Multiple Choice

Variable expenses for Alpha Corporation are 40% of sales. What are sales at the break-even point, assuming that fixed expenses total $150,000 per year:

• A) $250,000
• B) $375,000
• C) $600,000
• D) $150,000

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Definitions:

Par Value

The nominal or face value of a stock or bond, as stated by the issuing company.

Dividends

The allocation of a corporation's earnings to its shareholders, in the form of monetary distributions.

Retained Earnings

The portion of a company's profits that are kept or retained within the company to reinvest in the business or pay down debt, rather than distributed to shareholders as dividends.

Tax Liability

The total amount of tax owed to the tax authorities by an individual, organization, or corporation in a given period.