If Fixed Costs Are $220,000 and the Unit Contribution Margin

question 16

True/False

If fixed costs are $220,000 and the unit contribution margin is $25, the sales necessary to earn an operating income of $30,000 are 10,000 units.

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Definitions:

Horizontal Brand Extension

A strategy where a brand introduces new products in the same product category.

Particle Board

An engineered wood product made from wood chips, sawmill shavings, or even sawdust, and a synthetic resin or other suitable binder, which is pressed and extruded.

Diversification Strategy

A growth strategy where a business enters into a new market or industry which it is not currently in, while also creating a new product for that new market.

Brand Recognition

Brand recognition is the extent to which consumers can correctly identify a brand through its visual indicators like logos, colors, packaging, or advertising, without the brand name being mentioned.