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Beta Corp Has a 45% Contribution Margin Ratio on All Units

question 96

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Beta Corp. has a 45% contribution margin ratio on all units they sell. The company would like to make a profit of $20,000. Fixed costs are $70,000. What must Beta earn in sales revenue?


Definitions:

Post-Dating

Writing a future date on a document or check, thereby delaying its effectiveness or negotiability until that date.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned from one party to another with the legal ownership and benefits passing to the transferee.

Check

A documented, signed, and dated directive that instructs a bank to pay a predetermined amount of money to the bearer or a specified individual.

Indorsement

A rephrased definition: The act of signing one's name on the back of a negotiable instrument, effectively transferring rights to another party.

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