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:

Interest Rate Swap

A financial derivative that involves the exchange of interest rate cash flows between two parties based on a specified principal amount.

Fixed Rate

A constant interest rate for a loan or mortgage that remains unchanged for the entire term of the loan or for a set period.

Variable Rate

An interest rate that changes periodically over the lifetime of the loan based on an underlying benchmark or index.

Prime Rate

The interest rate that banks charge their most creditworthy customers, often used as a benchmark for other loans.