Falls Company Has a Contribution Margin of $32 Per Unit

question 70

Multiple Choice

Falls Company has a contribution margin of $32 per unit and fixed costs of $500,000,and it desires to earn a profit of $100,000.What is the sales volume in units required to achieve this desired profit?

• A) 3,125 units
• B) 18,750 units
• C) 15,625 units
• D) 12,500 units

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Definitions:

Authorization to Confess Judgment

A legal provision where a debtor gives a creditor the right to enter a judgment against them without trial if they fail to meet the terms of an agreement.

Negotiability

This term refers to the characteristic of a financial instrument that enables it to be transferred or assigned from one party to another with ease and legal effect.

I.O.U.

An informal document acknowledging a debt owed.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee’s name written on the document.