The Following Income Statement Is Provided for Ramirez Company for the Current

question 46

Multiple Choice

The following income statement is provided for Ramirez Company for the current year: $\begin{array}{|l|r|}\hline\text { Sales revenue (2,500 units x } \$ 40 \text { per unit) } & \$ 100,000 \\\hline \text { Cost of goods sold (varable; } 2,500 \text { units x } \$ 16 \text { per unit) } & (40,000) \\\hline \text { Cost of goods sold (fixed) } & (8,000) \\\hline \text { Gross margin } & 52,000 \\\hline \text { Administrative salaries } & (12,000) \\\hline \text { Depreciation } & (8,000) \\\hline \text { Supplies (2,500 units x } \$ 4 \text { per unit) } & (10,000) \\\hline \text { Net income } & \$ \quad 22,000\\\hline\end{array}$
What amount was the company's contribution margin?

• A)$50,000
• B)$22,000
• C)$52,000
• D)$60,000

Determine and evaluate the margin of safety in both percentage and dollar terms.

Analyze the impact of marketing and operational decisions on net operating income.

Understand how pricing decisions affect break-even analysis and profitability.

Understand the aesthetic and narrative contributions of early filmmakers like Georges Méliès and D.W.Griffith.

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Definitions:

Consideration

Something of value (such as money, services, or goods) that is exchanged between parties in a contract, making the agreement legally binding.

Offer and Acceptance

Fundamental principles in contract law where an offer proposal is made by one party and accepted by another, resulting in a legally binding agreement.

Agreement

A mutual understanding or arrangement between two or more parties outlining each party's rights and responsibilities.

Arbitration Ruling

An Arbitration Ruling is a binding decision made by an arbitrator or arbitration panel in a dispute resolution process outside of court.