Oxtron,Inc

question 31

Multiple Choice

Oxtron,Inc.substantially performed its obligations under a service contract.Oxtron is entitled to receive

• A)the full contract price.
• B)substantially nothing.
• C)the fair market value of its performance.
• D)the full contract price minus the value of the defects.

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Definitions:

Fixed Expenses

Costs that do not change in total despite changes in the level of business activity or production volume, such as rent or salaries.

Target Net Profit

A financial objective set by a business indicating the desired bottom-line income after all expenses, interest, and taxes have been deducted from total revenues.

Degree of Operating Leverage

A measure of how much a company's operating income changes in response to a change in sales volume, indicating the level of fixed versus variable costs.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating the ability to cover fixed costs and generate profit.