During 2016,Seth Britain Lab Supplied Hospitals with a Comprehensive Diagnostic

question 152

Multiple Choice

During 2016,Seth Britain Lab supplied hospitals with a comprehensive diagnostic kit for $120.At a volume of 80,000 kits,Seth had fixed costs of $1,000,000 and a profit before income taxes of $200,000.Due to an adverse legal decision,Seth's 2017 liability insurance increased by $1,200,000 over 2016.Assuming the volume and other costs are unchanged,what should the 2017 price be if Seth is to make the same $200,000 profit before income taxes? (CPA adapted)

• A) $122.50.
• B) $135.00.
• C) $152.50.
• D) $240.00.

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Definitions:

Charge

In physics, charge refers to a property of matter that causes it to experience a force when near other electrically charged matter; there are two types, positive and negative, which attract each other.

Solvent

Liquid that holds another substance in solution.

Anion

Ion carrying a negative charge.

Positively Charged

Having more protons than electrons, resulting in a net positive electric charge.