If Monthly Fixed Costs Are $21,000 and the Contribution Margin

question 14

Multiple Choice

If monthly fixed costs are $21,000 and the contribution margin ratio is 42%,the monthly sales volume required to break even is:

• A)$8,820.
• B)$50,000.
• C)$78,000.
• D)$39,207.

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Definitions:

Cash Budget

is a financial plan that estimates cash inflows and outflows over a specific period of time, often used for managing liquidity and ensuring financial stability.

Inflows And Outflows

Terms referring to the movement of money into and out of a business or account, representing income and expenses or investments and withdrawals, respectively.

Sales Budget

A sales budget estimates the amount of revenue a company expects to earn from sales over a specific period, serving as a planning and control tool for managing operations.

Direct Labor Cost

The total cost of workforce directly involved in the manufacturing of a product, including wages and salaries.