How Much Sales Are Required to Earn a Target Net

question 76

Multiple Choice

How much sales are required to earn a target net income of $200000 if total fixed costs are $250000 and the contribution margin ratio is 40%?

• A) $625000
• B) $1012500
• C) $1125000
• D) $500000

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Definitions:

Controlled Entities

These are entities over which another entity (the parent) has control, typically through ownership of more than half of the voting rights or through other mechanisms.

Associates

An entity over which an investor possesses significant influence, typically characterized by owning between 20% and 50% of the voting stock.

Joint Ventures

A partnership where multiple parties combine their assets to achieve a particular goal.

Entity

A legal or business entity that is capable of incurring liabilities and undertaking activities, often used to describe businesses, organizations, or corporations.