Company A makes and sells a single product, unless otherwise indicated. What happens to the break-even point when the variable cost per unit decreases?
What will be an ideal response?
Answers will vary.
The break-even point decreases.
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Operating income is determined by deducting all fixed costs related to production, selling, and administration from contribution margin
Indicate whether the statement is true or false
Everett, Miguel, and Ramona are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: Everett, $50,000 Cr.; Miguel, $40,000 Dr.; and Ramona, $30,000 Cr. How much cash should be distributed to Everett assuming that Miguel pays the deficiency?
A) $50,000 B) $20,000 C) $30,000 D) $40,000
At the U.S. Open Tennis Championship a statistician keeps track of every serve that a player hits
during the tournament. The lower quartile of a particular player's serve speeds was reported to be 99 mph. Which of the following interpretations of this information is correct? A) 75% of the player's serves were hit at speeds greater than 99 mph. B) 99 serves traveled faster than the lower quartile. C) 25% of the player's serves were hit at 99 mph. D) 75% of the player's serves were hit at speeds less than 99 mph.
According to the trade-off theory of capital structure,
A. optimal capital structure occurs when the benefits of limited liability is just offset by the value of the firm's lawyers' claims. B. optimal capital structure occurs when the stockholders' right to default is balanced by the bondholders' right to get interest and principal payments. C. optimal capital structure occurs when the present value of tax savings on account of additional borrowing just offsets the increase in the present value of costs of distress. D. None of these options are correct.