Kanmore Produces and Sells Three Products

question 47

Multiple Choice

Kanmore produces and sells three products.Last month's results are as follows: Fixed costs total $200,000.What sales volume would generate an operating profit of $150,000? (Assume the current product mix. )

• A)$650,000.
• B)$610,000.
• C)$729,167.
• D)$850,000.

Comprehend the budgeting process for different departments within an organization, including production, sales, and purchasing.

Recognize the importance and process of sales forecasting in budgeting.

Grasp the concept of long-term and short-term budgeting and their significance.

Identify the types of budgets used within an organization, such as capital expenditure budgets, operating budgets, and financial budgets.

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Definitions:

Operating Income

A metric that calculates the profits realized from a business's core operations, excluding deductions of interest and taxes.

Break-even Point

The point at which total revenue equals total costs, resulting in no profit or loss for the business.

Break-even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and one has "broken even".

Margin of Safety

An accounting metric indicating how much sales can decline before a business reaches its breakeven point, measuring operational risk.