Anniston Gifts Makes a Product That Sell for $40 Per

question 90

Multiple Choice

Anniston Gifts makes a product that sell for $40 per unit has and has a unit variable cost of $18. The contribution margin ratio is 55%. Annual fixed costs are $11,990. The company expects to sell 2,000 units this year. How much would profits increase by, if 140 more units are sold than expected?

• A) $3,080
• B) $47,080
• C) $5,600
• D) $545

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Definitions:

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to businesses and individuals.

Federal Reserve

The central banking system of the United States responsible for setting monetary policy, including the manipulation of interest rates to control inflation and stabilize the currency.

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The smallest allowable increment by which the price of a financial instrument can move on the trading platform.