If the Contribution Margin Ratio Is 0

question 75

Multiple Choice

If the contribution margin ratio is 0.25, targeted operating income is $25,000, and targeted sales volume in dollars is $200,000, then total fixed costs are:

• A)$50,000
• B)$100,000
• C)$75,000
• D)$25,000

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Definitions:

Excise Tax

Excise tax is a specific tax levied on certain goods, services, or activities, typically to discourage their use or to raise revenue for specific government programs.

Tax Incidence

The distribution of the economic burden of a tax between buyers and sellers, depending on the elasticity of demand and supply.

Producers

Entities or individuals that create goods or services for consumption by consumers.

Excise Tax

A tax charged on specific goods, such as alcohol and tobacco, usually imposed to discourage certain behaviors or generate revenue.