XYZ Company's Sales Are $750,000 with Operating Profits of $130,000

question 70

Multiple Choice

XYZ Company's sales are $750,000 with operating profits of $130,000.If the contribution margin ratio is 40%,what did the fixed costs amount to?

• A)$370,000.
• B)$300,000.
• C)$270,000.
• D)$170,000.

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Definitions:

Drawing Account

An account used to record withdrawals of business assets by the owner for personal use, reducing the capital account.

Salary Expense

The cost incurred by a company for the payment of regular salaries to its employees.

Accrued Salaries

Salaries that have been incurred but not yet paid by the end of a financial period, representing a liability for the business.

Closing

The process of finalizing accounting records at the end of an accounting period, including updating accounts and preparing financial statements.