The Contribution Margin Ratio Is 25% for Crowne Company and the Break-Even

question 149

Multiple Choice

The contribution margin ratio is 25% for Crowne Company and the break-even point in sales is $200,000. If Crowne Company's target operating profit is $60,000, sales would have to be:

• A) $260,000.
• B) $440,000.
• C) $280,000.
• D) $240,000.

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Definitions:

Noncash Assets

Assets owned by a business that are not in the form of cash but can be converted into cash within a year, including inventory, real estate, and investments.

Safe Cash Payments

Transactions made in cash that are secure and minimize the risk of theft or loss.

Liquidation Expenses

Costs associated with winding up a company's operations, selling off assets, and paying off creditors in the event of liquidation or bankruptcy.

Profits and Losses

The financial results of a company's operations, indicating the net money made or lost within a specific period.