A Product Sells for $20 Per Unit and Has a Contribution

question 83

Multiple Choice

A product sells for $20 per unit and has a contribution margin ratio of 40%.Fixed expenses total $240,000 annually.How many units of the product must be sold to yield an operating income of $60,000?

• A) 37,500 units.
• B) 40,000 units.
• C) 65,000 units.
• D) 30,000 units.

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Definitions:

Continuous Review

A perpetual inventory tracking system where the inventory level of an item is constantly monitored, and orders are placed as soon as it drops below a predetermined level.

Lead Time

The total time taken from the initiation to the completion of a production process, including the time required for ordering materials and manufacturing.

Review Interval

The predefined period between successive evaluations or assessments of a system, process, or performance.

Supply Reduction

A decrease in the amount of goods provided in the market, which can result from various factors, including production cuts or supply chain disruptions.