Watson Company Has Monthly Fixed Costs of $83,000 and a 40

question 110

Multiple Choice

Watson Company has monthly fixed costs of $83,000 and a 40% contribution margin ratio.If the company has set a target monthly income of $15,000,what dollar amount of sales must be made to produce the target income?

• A)$245,000
• B)$207,500
• C)$37,300
• D)$170,000
• E)$39,200

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Definitions:

Saliva

A watery secretion in the mouths of animals, produced by the salivary glands, which aids in digestion and oral hygiene.

Propulsive Movements

Bodily movements that drive or push something forward, typically referring to the contractions in the digestive tract moving food along.

Peristalsis

Rhythmic waves of muscular contraction and relaxation in the walls of hollow tubular organs, such as the ureter or parts of the digestive tract, that serve to move the contents through the tube.

Digestive Tract

The series of hollow organs joined in a long, twisting tube from the mouth to the anus, through which food is digested and nutrients absorbed.