The Formula for Calculating the Sales Dollars Required to Meet

question 53

Multiple Choice

The formula for calculating the sales dollars required to meet target operating income is

• A)Total fixed costs plus target operating income divided by contribution margin per unit.
• B)Total fixed costs plus target operating income divided by contribution margin ratio.
• C)Total fixed costs plus target operating income divided by total variable costs.
• D)Contribution margin plus target operating income divided by total fixed costs.

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Definitions:

Dutch Auction

An auction in which the auctioneer starts with a high asking price which is lowered until some participant is willing to accept the auctioneer's price.

Winning Bidder

The individual or entity that offers the highest price in a bidding process, such as auctions or competitive tenders.

Seasoned Equity Offering (SEO)

A new equity issue of securities by a company that has previously issued securities to the public.

Underpriced

A term used when a stock or other security is selling for a price that is lower than its apparent or intrinsic value.