A Company Has Sales of $87,500 at the Break-Even Point

question 23

Multiple Choice

A company has sales of $87,500 at the break-even point and fixed costs are $35,000.Assuming cost behaviour does not change if sales increase by $20,000 how much will operating income will increase by?

• A) $20,000.00.
• B) $12,000.00.
• C) $8,000.00.
• D) $4,000.00.

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Definitions:

Market Returns

The financial gain or loss that an investment or economic activity brings over time, often related to the supply and demand in a marketplace.

Mandatory Benefit

An employee benefit, such as social security or workers' compensation, that is required by law.

Canada Pension Plan

A government-run retirement pension plan in Canada that provides contributors and their families with partial replacement of earnings in the case of retirement, disability, or death.

Employment Insurance

A government program that provides temporary financial assistance to unemployed workers who meet certain eligibility criteria.