A Company Requires $1,360,000 in Sales to Meet Its Net

question 45

Multiple Choice

A company requires $1,360,000 in sales to meet its net income target.Its contribution margin is 30%, and fixed costs are $240,000.What is the target net income?

• A)$408,000
• B)$312,000
• C)$560,000
• D)$168,000

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Definitions:

Binding Price Floor

A minimum price set by the government above the equilibrium price, leading to a surplus of goods or services in the market.

Supply And Demand

A model that explains how the interaction between product availability and consumers' desire determines the price of goods and services.

Subsidies

Financial support extended by the government to economic sectors, businesses, or individuals, aimed at promoting certain activities or reducing the prices of products.

Cotton Farmers

Individuals or entities engaged in the cultivation of cotton, which is a key agricultural crop used in the textile industry.