Assume Total Fixed Costs of $160,000,variable Costs Per Unit of $6

question 87

Multiple Choice

Assume total fixed costs of $160,000,variable costs per unit of $6, and contribution margin per unit of $4. What are the sales dollars required to meet a target operating income of $50,000?

• A) $525,000
• B) $315,000
• C) $210,000
• D) $160,000

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Definitions:

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets to generate sales revenue, calculated by dividing sales revenue by the average total assets.

Operating Lease

Operating lease is a contract that allows for the use of an asset but does not convey rights of ownership of the asset.

Capital Lease

A leasing arrangement in which the lessee records the leased asset as if it was a purchase, reflecting it on their balance sheet as an asset and a corresponding liability.

Lease Inception

The point in time at which a lease agreement is initiated or executed between the lessor and the lessee.