A firm sells a single product for $10. Its variable cost per unit is $6 and fixed costs are $80. If the firm has a 25% income tax rate, the sales revenue for a 15% net profit margin is Select one: a. $40. b. $32. c. $400. d. $320.

A firm sells a single product for $10. Its variable cost per unit is $6 and fixed costs are $80. If the firm has a 25% income tax rate, the sales revenue for a 15% net profit margin is Select one: a. $40. b. $32. c. $400. d. $320.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

A firm sells a single product for $10. Its variable cost per unit is $6 and fixed costs are $80. If the firm has a 25% income tax rate, the sales revenue for a 15% net profit margin is

Select one:

a. $40.

b. $32.

c. $400.

d. $320.

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