Abrams Co Has Total Fixed Costs of $240,000 and a Contribution

question 61

Essay

Abrams Co. has total fixed costs of $240,000 and a contribution margin ratio of 40%. If rent expense increases by $5,000, how much will sales have to increase to cover this increase in costs?

---

Definitions:

Prospective Buyers

Potential customers who have expressed interest in a product or service and may potentially make a purchase in the future.

Positive Buying Experience

A customer's satisfactory and rewarding interaction with a business, product, or service, encompassing ease of purchase, quality of service, and overall fulfillment of customer needs.

Marketing Concept

A business philosophy focusing on identifying and meeting the needs and wants of consumers as the key to a company's success and competitiveness.

Consumerism

The movement advocating for the rights and protection of consumers, including the demand for products that are safe, reliable, and reasonably priced.