If Total Fixed Costs Are $62,000, Contribution Margin Per Unit

question 74

Multiple Choice

If total fixed costs are $62,000, contribution margin per unit is $5.00, and targeted after-tax net income is $12,000 with a 40 percent tax rate, then the number of units that must be sold is

• A) 16,400.
• B) 14,800.
• C) 24,667.
• D) 11,440.

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Definitions:

Frozen Pizzas

Pre-made pizzas that are sold frozen to consumers, who then bake or heat them at home. They are a convenient, quick meal option that varies in quality and ingredients.

Substitutes

Goods or services that can be used in place of each other, where the increase in the price of one leads to an increase in the demand for another.

Bagels

A type of bread product originating from the Jewish communities of Poland, known for its dense, chewy texture and a doughnut-like shape.

Complementary Goods

Goods that are consumed together because the use of one product increases the use of another, such as smartphones and phone cases.