Key Company Has a Targeted Sales Volume of 62,300 Units

question 86

Multiple Choice

Key Company has a targeted sales volume of 62,300 units.Total fixed costs are $31,200.The contribution margin per unit is $1.20.What is targeted net income?

• A) $31,200
• B) $37,440
• C) $43,560
• D) $74,760

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Definitions:

Fixed Costs

Fixed costs are expenses that do not vary with the level of production or sales within a certain range, such as rent, salaries, and insurance.

Automated Machine

A machine operated with minimal human intervention, typically using computer-controlled systems.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the extent to which sales can drop before a business incurs a loss.

Variable Expenses

Costs that fluctuate in direct proportion to changes in the level of business activity or output.