The Mini-Max Company Has the Following Cost Information on Their

question 11

Multiple Choice

The Mini-Max Company has the following cost information on their new prospective project. Fixed costs are $200/year. (Initial investment is $700) .
Variable costs: $3/unit.
Depreciation: $140/year.
Price: $8/unit.
Discount rate: 12%.
Project life: 5 years.
Tax rate: 34%.
Calculate the accounting break-even point.

• A) 68.00 units/year.
• B) 103.03 units/year.
• C) 113.33 units/year.
• D) 25.00 units/year.

Correctly adjust entries for previously recorded transactions.

Understand the classification of liabilities and assets on the balance sheet.

Interpret financial data from a balance sheet, including recognizing current assets and liabilities.

Evaluate a company's liquidity through its current assets and current liabilities.

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Definitions:

Excise Tax

A tax levied on specific goods or activities, such as alcohol, tobacco, and gasoline, often intended to discourage their use or to raise revenue.

Sales Tax

A tax imposed by governments on the sale of goods and services, adding on to the purchase price paid by consumers.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Regressive

Relating to a taxation mechanism where the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income earners.