Figure 4-1

question 7

Multiple Choice

Figure 4-1. Foster Company makes power tools.The budgeted sales are $420,000,budgeted variable costs are $147,000,and budgeted fixed costs are $227,500.
Refer to Figure 4-1.What is the contribution margin ratio?

• A)35%
• B)65%
• C)54%
• D)89%
• E)50%

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Definitions:

Economic Stability

Economic stability refers to a condition where an economy experiences steady growth, low inflation, and minimal unemployment, thereby reducing uncertainty in economic planning.

Government Policies

A course or principle of action adopted or proposed by a government, political party, or ruling authority.

Stagflation

A situation in which the inflation rate is high, economic growth rate slows, and unemployment remains steadily high.

Price Level

A measure of the average prices of goods and services in an economy at a given time, often used to evaluate inflation or deflation.