If Fixed Costs Are $20,000, Contribution Margin Per Unit Is

question 46

True/False

If fixed costs are $20,000, contribution margin per unit is $3 and target pre-tax profit is $40,000 then sales is required to be 20,000 units.

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Definitions:

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur, providing a more accurate picture of a company's financial condition.

Recorded

The act of documenting financial transactions in the accounting records or ledgers of a company.

Adjusted Trial Balance

A financial statement that lists all accounts of a company and their balances after adjustments have been made.

Adjusting Entries

Journal entries made in accounting to update the records for revenues and expenses that have accrued but not yet been recorded through standard accounting transactions.