If the Fixed Costs Are $2,400, Targeted Before-Tax Operating Profit

question 61

True/False

If the fixed costs are $2,400, targeted before-tax operating profit is $1,200, tax rate is 25%, selling price per unit is $2, and contribution margin ratio is 40%, then the sales volume is 9,000 units.

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Definitions:

Merchandise

Goods bought and sold by retailers.

Cash Collections

The process of gathering monies that are owed to a business by its customers or clients.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, prior to any purchases or production during the period.

Ending Inventory

The value of goods available for sale at the end of an accounting period after goods sold are subtracted.