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

Quizplus · Accepted Answer

The pretax net income is calculated as follows: Total Revenue - Total Variable Costs - Total Fixed Costs = (25,000 units * $11) - (25,000 units * $6) - $70,000 = $275,000 - $150,000 - $70,000 = $55,000.

A Firm Expects to Sell 25,000 Units of Its Product