When Fixed Costs Are $18,000 and the Contribution Margin Per

question 54

Multiple Choice

When fixed costs are $18,000 and the contribution margin per unit is $4,the breakeven point is

• A)4,500 units.
• B)2,230 units.
• C)$22,300.
• D)$72,000.

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Definitions:

Debt-Equity Ratio

The measure indicating the dual use of debt and equity in the economic structuring of a company’s assets.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, represented as a percentage.

Profit Margin

A financial metric indicating the percentage of revenue that remains as profit after accounting for costs and expenses.

Retention Ratio

The fraction of net profit not disbursed as dividends, instead held within the company.