If the Contribution Margin Ratio Is 0

question 148

Multiple Choice

If the contribution margin ratio is 0.40, targeted operating income is $80,000, and targeted sales volume in dollars is $500,000, then total fixed costs are:

• A)$80,000
• B)$100,000
• C)$120,000
• D)$200,000

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Definitions:

Holder in Due Course

A legal term referring to a party who has acquired a negotiable instrument in good faith and without notice of any defects.

Security Interest

A legal right or hold on assets that have been pledged as security, typically for the purpose of ensuring loan repayment.

Lien

A lien is a legal right or claim against a property by a creditor, securing the payment of a debt or the performance of some obligation.

Negotiable Instrument

A document that promises the payment of a certain sum of money, either upon request or at a predetermined time, with the name of the individual responsible for paying included on the document.