The Formula for Calculating the Sales Dollars Required to Meet

question 67

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:

Demand-Management Policy

A set of government measures intended to influence the economy by controlling demand, typically through fiscal and monetary policies.

Stagflation

A period of slow economic growth and high unemployment with rising prices.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, at given price levels.

Natural Rate

The long-term unemployment rate around which the labor market is in equilibrium, unaffected by short-term fluctuations.