A Company Has Fixed Costs of $320,000 and a Contribution

question 232

Multiple Choice

A company has fixed costs of $320,000 and a contribution margin per unit of $15. If the firm wants to earn a target $40,000 pretax income, how many units must be sold (rounded to the nearest whole unit) ?

• A) 21,333.
• B) 2,667.
• C) 20,000.
• D) 18,666.
• E) 24,000.

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Definitions:

Mississippi River

One of the longest rivers in North America, flowing from northern Minnesota to the Gulf of Mexico, and historically significant as a major transport route for trade, especially during the 19th century.

Santa Fe Trail

A historic trade route connecting Franklin, Missouri, with Santa Fe, New Mexico, used during the 19th century.

New Mexico's Commerce

Economic activities and trade occurring within New Mexico, often highlighting its unique position in the southwestern United States and its trade links.

Independence, Missouri

A city known for its historical significance, especially as the starting point of the Oregon, California, and Santa Fe trails, and the hometown of President Harry S. Truman.