Fixed Costs Equal $15,000,unit Contribution Margin Equals $25,and the Number

question 163

Multiple Choice

Fixed costs equal $15,000,unit contribution margin equals $25,and the number of units sold equal 1,150.Operating income is ________.

• A) $28,750
• B) $13,750
• C) $15,000
• D) $14,750

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Definitions:

Perpetual Inventory System

An inventory accounting system that records purchases and sales of merchandise immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Periodic Inventory System

A periodic inventory system is an accounting method where inventory levels and cost of goods sold are determined at the end of an accounting period, not after each sale or purchase.

Freight Charges

Costs associated with transporting goods from one location to another, paid by the shipper or the receiver, depending on the terms of sale.

Perpetual Inventory System

An inventory management system where updates are made continuously to the inventory records to reflect sales, purchases, and returns in real-time.