When Isaiah Company Has Fixed Costs of $120,000 and the Contribution

question 133

Multiple Choice

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is

• A) 16,000 units
• B) 8,000 units
• C) 6,000 units
• D) 4,000 units

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Definitions:

Expense Recognition

An accounting principle that dictates the conditions under which an expense is recognized and recorded in financial statements.

Revenue

The total amount of income generated by the sale of goods or services related to a company's primary operations.

Liability

A financial obligation or amount owed by a company to another party.

Asset

An economic resource that is owned or controlled by an individual or entity, expected to provide future benefits.