The Formula Used to Find the Number of Units That

question 88

Multiple Choice

The formula used to find the number of units that need to be sold in order to breakeven or generate a target profit is:

• A)contribution margin ratio ÷ (fixed expenses + operating income).
• B)contribution margin per unit ÷ (fixed expenses + operating income).
• C)(fixed expenses + operating income)÷ contribution margin ratio.
• D)(fixed expenses + operating income)÷ contribution margin per unit.

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Definitions:

Journal

A book or electronic record where all financial transactions of a business are initially recorded, often before posting to ledgers.

Chronological Record

An organized account of events, transactions, or entries in the order they occurred over time.

Accounts Receivable

Payments yet to be received by a company from customers for goods or services already provided.

Notes Payable

Financial obligations represented by written promissory notes that specify the terms under which a borrower agrees to repay a lender.