Nussbaum Corporation Has Provided the Following Contribution Format Income Statement

question 183

Multiple Choice

Nussbaum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The number of units that must be sold to achieve a target profit of $16,100 is closest to:

• A) 32,000 units
• B) 19,400 units
• C) 10,400 units
• D) 23,000 units

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Definitions:

Permanent Working Capital

The minimum amount of working capital a company needs to sustain its daily operations continuously.

Aggressive Working Capital Policy

A strategy involving higher levels of current assets relative to liabilities, aiming for growth but increasing liquidity risk.

Short Term Financing

Borrowing funds for a period typically less than one year, often used to cover gaps in cash flow or finance immediate expenses.

Temporary Working Capital

Additional working capital required to support the fluctuating operational needs of a business beyond its permanent working capital.