A Firm Makes and Sells Three Standard Products in a Specific

question 97

Multiple Choice

A firm makes and sells three standard products in a specific product mix.All three products are made using the same production facilities.The following budgeted data for the coming year is available.Total annual fixed costs $348 000
Tax rate 40%
What sales revenue would be required for each of the three products to earn a profit of $139 200 after tax?

• A) $400 000;$600 000;$480 000
• B) $296 000;$740 000;$444 000
• C) $200 000;$300 000;$240 000
• D) $800 000;$1 200 000;$960 000

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Definitions:

Budget Lines

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at specific prices.

Equilibrium Position

Market equilibrium is achieved when demand equals supply, stabilizing prices as a consequence.

Price of B

The cost at which a specific good, service, or commodity "B" is offered for sale to consumers.

Indifference Curves

Indifference curves are graphical representations showing combinations of goods between which a consumer is indifferent, highlighting preferences.