A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6.Total fixed costs are $70,000.The pretax net income is:

A) $55,000.
B) $90,000.
C) $125,000.
D) $150,000.
E) $380,000.

Question

Zybrea Knight · Accepted Answer

Final Answer : A, Explanation :  The pretax net income is calculated as follows: Total Revenue - Total Variable Costs - Total Fixed Costs. Total Revenue = 25,000 units * $11/unit = $275,000. Total Variable Costs = 25,000 units * $6/unit = $150,000. Pretax Net Income = $275,000 - $150,000 - $70,000 = $55,000.

A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6.Total fixed costs are $70,000.The pretax net income is:

A) $55,000.
B) $90,000.
C) $125,000.
D) $150,000.
E) $380,000.

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A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6.Total fixed costs are $70,000.The pretax net income is:A) $55,000.B) $90,000.C) $125,000.D) $150,000.E) $380,000.

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Learning Objectives

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Related questions

A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6.Total fixed costs are $70,000.The pretax net income is:

A) $55,000.
B) $90,000.
C) $125,000.
D) $150,000.
E) $380,000.