Andre, Beau, and Caroline Share Profits and Losses of Their

question 74

Multiple Choice

Andre, Beau, and Caroline share profits and losses of their partnership as 2:2:5. If the net income is $900,000, calculate the profit share of Caroline.

• A)$200,000
• B)$500,000
• C)$250,000
• D)$100,000

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Definitions:

Cost-Plus Pricing

A method where the sale price is calculated by adding a particular markup on top of the product's cost per unit.

Variable Manufacturing Cost

Costs that vary directly with the level of production output, including direct materials and direct labor expenses.

Mark-Up Percentage

The percent difference between the cost of a good or service and its selling price, used to calculate the selling price from the cost.

Contribution Margins

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.