[The Following Information Applies to the Questions Displayed Below

question 85

Multiple Choice

[The following information applies to the questions displayed below.]
Accents Associates sells only one product,with a current selling price of $70 per unit.Variable costs are 40% of this selling price,and fixed costs are $12,000 per month.Management has decided to reduce the selling price to $65 per unit in an effort to increase sales.Assume that the cost of the product and fixed operating expenses are not changed by this reduction in selling price.
-At the current selling price of $70 per unit,the contribution margin ratio is:

• A)60%.
• B)40%.
• C)67%.
• D)120%.

Analyze common equity changes through balance sheets.

Understand the effects of depreciation and asset changes on tax payments and net cash flow.

Calculate dividends based on retained earnings and net income data.

Grasp the relationship between corporate actions and changes in cash on the balance sheet.

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