London Plastics Has Monthly Fixed Costs of $84,000,while Its Variable

question 258

Multiple Choice

London Plastics has monthly fixed costs of $84,000,while its variable costs are $4.00 per unit.If the sales price of a unit is $15.00 and London Plastics sell 14,000 units,the company's total sales revenue will be

• A)$154,000.
• B)$210,000.
• C)$84,000.
• D)$70,000.

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Definitions:

Debt-Equity Ratio

The measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.

Net Income

The overall earnings of a business following the deduction of all costs, taxes, and expenses from its gross revenue.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without having to increase leverage or equity financing.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by shareholders' equity.