If a Firm Sells 40,000 Units and the Contribution Margin

question 38

Multiple Choice

If a firm sells 40,000 units and the contribution margin on the firm's single product is $4.00 per unit and fixed costs are $60,000, what will the firm's operating profit be at this level of sales volume?

• A) $100,000
• B) $30,000
• C) $15,000
• D) $145,000

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Definitions:

Investments

The act of allocating resources with the expectation of generating an income or profit, often through acquiring assets like stocks, bonds, or real estate.

Business

Any organization or entrepreneurial entity engaged in commercial, professional, or industrial activities.

Assessed Values

The valuation placed on a property by a public tax assessor for purposes of taxation.

Taxes

Mandatory financial charges or levies imposed by a government on its citizens and businesses to fund public expenditures.