A Company Has Fixed Costs of $270,000,a Unit Contribution Margin

question 91

Multiple Choice

A company has fixed costs of $270,000,a unit contribution margin of $14,and a contribution margin ratio of 55%.If the firm wants to earn a target $60,000 pretax income,what amount of sales must the company make (rounded to the nearest whole dollar) ?

• A)490,909.
• B)330,000.
• C)109,090.
• D)381,818.
• E)600,000.

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Definitions:

Moral Hazard

The situation in which one party is more likely to take risks because another party bears the cost of those risks.

Deductibles

The amount an insured person is required to pay out of pocket before an insurance company covers any expenses.

Co-Payments

Fixed amounts that an insured person is required to pay at the time of receiving medical service, with the balance covered by their health insurance.

Third-Party Liability Insurance

Insurance coverage meant to protect against claims made by a third party for damages or injuries that the policyholder is responsible for.