Which of the Following Is Not a Step in Calculating

question 81

Multiple Choice

Which of the following is not a step in calculating the breakeven point?

• A)Put everything into "constant" form - sales price per unit,variable cost per unit,total fixed cost.
• B)Subtract fixed cost from sales revenue.
• C)Calculate the contribution margin per unit.
• D)Solve by dividing total fixed cost by contribution margin per

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Definitions:

Capital Lease

A long-term lease agreement that is classified as a purchase by the lessee for accounting purposes because it effectively transfers substantially all the risks and rewards of ownership.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Lease Payments

Periodic payments made by a lessee to a lessor for the use of an asset under a lease agreement.

Implicit Lease Rate

The interest rate embedded in a lease agreement, representing the cost of leasing as an annualized percentage, which may not be explicitly stated.