You Have Been Provided with the Following Information: If Sales

question 80

Multiple Choice

You have been provided with the following information: If sales decrease by 500 units,how much will fixed expenses have to be reduced by to maintain the current operating profit of $6,000?

• A)$9,000.
• B)$7,500.
• C)$6,000.
• D)$3,000.

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Definitions:

Auditing Standards

The guidelines and rules that auditors follow when conducting financial audits to ensure fairness, accuracy, and consistency.

Independent Auditors

External experts who examine the financial records and statements of an organization to ensure accuracy and compliance with applicable standards.

Securities & Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws, regulating the securities industry, and overseeing the stock and options exchanges.

Inventories

Items held for sale in the ordinary course of business, or goods to be used in the production of goods to be sold, including raw materials, work-in-progress, and finished goods.