Drake Company's Contribution Format Income Statement for the Most Recent

question 225

Multiple Choice

Drake Company's contribution format income statement for the most recent year appears below:
-If the company desires a net operating income of $20,000,the number of units needed to be sold is:

• A)28,500 units
• B)31,000 units
• C)31,750 units
• D)26,500 units

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Definitions:

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs.

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Long-Run Profits

The amount of money a firm makes after all inputs have been adjusted to their optimal levels, considering the long-term outlook.

Short-Run Profits

Profits earned during a brief period of time, not considering long-term investments or fixed costs.