Which of the Following Statements Regarding Company a Is Incorrect

question 115

Multiple Choice

Which of the following statements regarding Company A is incorrect?

• A) If Company A has fixed costs of $720,000, a selling price of $50 per unit, and contribution margin of $30 per unit, its break-even volume in units is 36,000 units.
• B) If Company A has fixed costs of $720,000, a selling price of $50 per unit, and contribution margin of $30 per unit, its variable expenses must be $20 per unit.
• C) If Company A has fixed costs of $720,000, a selling price of $50 per unit, and contribution margin of $30 per unit, once it has covered its fixed costs, net income will increase by $30 for each additional unit sold.
• D) Both if Company A has fixed costs of $720,000, a selling price of $50 per unit, and contribution margin of $30 per unit, its break-even volume in units is 36,000 units and if Company A has fixed costs of $720,000, a selling price of $50 per unit, and contribution margin of $30 per unit, its variable expenses must be $20 per unit are incorrect.

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Definitions:

Ethical Considerations

involve the principles and values that guide decisions and actions by highlighting what is right, fair, and just.

Cause-and-Effect Relationship

Describes a relationship where one event (the cause) makes another event happen (the effect).

Psychological Tests

Procedures used to measure and evaluate personality traits, emotional states, aptitudes, interests, abilities, and values.

Personality Traits

Enduring characteristics that describe an individual's behavior.