Total Fixed Costs Divided by Fixed-Cost Contribution Leads to Which

question 74

Multiple Choice

Total fixed costs divided by fixed-cost contribution leads to which of the following?

• A) profit maximization
• B) breakeven point in units
• C) perceived value
• D) total revenues

---

Definitions:

Fixed Manufacturing Overhead

Fixed manufacturing overhead costs are those production expenses that do not vary with the volume of production, such as salaries of managerial staff and rent of the factory.

Budgeted Fixed Manufacturing Overhead

The predetermined amount of fixed overhead expenses expected to be incurred in the manufacturing process.

Net Operating Income

Profit of a business after all operating expenses, excluding taxes and interest, have been deducted from total revenue.

Standard Cost Variances

The differences between actual costs incurred and the standard costs that were expected or budgeted, used for management control and analysis.