The Amount by Which Actual or Expected Sales Exceeds Break-Even

question 63

Multiple Choice

The amount by which actual or expected sales exceeds break-even sales is referred to as

• A) contribution margin.
• B) unanticipated profit.
• C) margin of safety.
• D) target net income.

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Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Field Warehouse Loan

A form of short-term financing where a lender provides a loan with inventory as collateral, which is stored on the borrower's premises but controlled by an independent third party.

Marketable Securities

Financial instruments that can be quickly converted into cash at market value, including stocks and bonds.

Raw Materials

Basic materials that are used in the production process of manufacturing goods, including metals, oil, grains, and other commodities.