Assume Unicorn Company Has the Following Information Available If Variable Costs Increase to $65 Per Unit,what Is the l

question 116

Multiple Choice

Assume Unicorn Company has the following information available:
$\begin{array} { l } \text {Selling price per unit }&\$100\\ \text { Variable cost per unit }&\$45\\ \text { Fixed costs per year}&\$420,000\\ \text { Expected sales per year}&20,000 \text { units }\\\end{array}$

If variable costs increase to $65 per unit,what is the expected net income for one year?

• A) $280,000
• B) $700,000
• C) $880,000
• D) $1,580,000

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Definitions:

Revenue

The income generated from normal business operations and before any expenses are deducted.

Excise Tax

A tax imposed on specific goods, services, or activities, such as gasoline, cigarettes, or gambling, usually intended to discourage their use or to raise revenue.

Luxury Boats

Expensive, high-end boats equipped with superior amenities, designed for comfort, performance, and status.

Tax Burden

The measure of the total taxes paid by an individual, corporation, or another entity relative to its income, assets, or consumption levels.