Liu Sales Has Two Store Locations

question 123

Multiple Choice

Liu Sales has two store locations. Sanford has fixed costs of $250,000 per month and a contribution margin ratio of 35%. Orlando has fixed costs of $400,000 per month and a contribution margin ratio of 65%. At what sales volume would the two stores have equal profits or losses?

• A) $500,000.
• B) $650,000.
• C) $1,300,000.
• D) Cannot determine with the information given.

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Definitions:

Demand Curves

A visual depiction showing how the price of a product relates to the amount people want to buy.

Supply Curves

Graphical representations of the relationship between the price of goods and the quantity that producers are willing to supply.

Excise Tax

A tax levied on specific goods, services, or transactions, often to discourage their use or generate revenue.

Government Salaries

The remuneration received by individuals employed by the government, including wages, benefits, and allowances.