LeGrand Corporation Reported the Following Amounts in Its Income Statement

question 40

Multiple Choice

LeGrand Corporation reported the following amounts in its income statement:
$$\begin{array} { l r } \text { Sales revenue } & \$ 440,000 \\\text { Advertising expense } & 60,000 \\\text { Interest expense } & 10,000 \\\text { Salaries expense } & 55,000 \\\text { Utilities expense } & 25,000 \\\text { Income tax expense } & 45,000 \\\text { Cost of goods sold } & 180,000\end{array}$$
What was LeGrand's gross profit?

• A)$260,000.
• B)$180,000.
• C)$220,000.
• D)$120,000.

Apply the utility maximization principle to determine optimal consumption bundles.

Calculate the effects of changes in income on consumption choices.

Understand and calculate the marginal rate of substitution (MRS) and its role in consumption decisions.

Analyze the impact of price changes on consumption choices.

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Definitions:

Unlimited Liability

A legal structure in which the owner's personal assets can be used to pay off the business's debts without limit.

Proprietor

An individual who owns a business establishment or sole proprietorship, having full control and responsibility for its operations and profits.

Corporate Shareholders

Individuals or entities that legally own one or more shares of stock in a corporation, thus having a claim on a part of its assets and earnings.

Limited Liability

A legal structure that limits the personal financial risk of the company's shareholders to their investment in the company.