If the Contribution Margin Ratio Is 0

question 23

Multiple Choice

If the contribution margin ratio is 0.40,targeted net profit is $87 600,and targeted sales volume in dollars is $480 000,then total fixed costs are:

• A)$87 600.
• B)$144 000.
• C)$104 400.
• D)$67 000.

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Definitions:

Investment

Assigning monetary assets in hopes of achieving financial gain or income.

Cash Flow Timeline

A visual representation that shows the schedule of inflows and outflows of cash within a business over a specific period.

Shortage Costs

Expenses incurred from the unavailability of inventory or resources, leading to missed sales or production delays.

Carrying Costs

The expenses incurred by holding inventory, including storage, insurance, and taxes.