The Pierson Co

question 116

Multiple Choice

The Pierson Co. has the following unit and mix data: Do Dah Total
Unit sales price $5.00 $4.00
Unit contribution margin 0.75 1.20
Sales mix ($) 80% 20%
Fixed costs $99,000
Target profit 24,750
How many units in total must be sold to earn the target profit?

• A)687,500
• B)165,000
• C)112,500
• D)144,375

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Inventory

The goods and materials a business holds for the purpose of resale, production, or repair.

Best-price Requirements

Regulatory or policy stipulations that ensure consumers or buyers are getting the most favorable price available for goods or services, often seen in government procurement.

U.S. Antitrust Law

Legislation aimed at promoting competition and preventing unfair monopolies or practices that could harm consumers or market fairness.