A Product Sells for $20 Per Unit, and Has a Contribution

question 162

Multiple Choice

A product sells for $20 per unit, and has a contribution margin ratio of 40%. Fixed expenses are $120,000. How many units must be sold to yield a profit of $30,000?

• A) 18,750
• B) 20,000
• C) 25,000
• D) 12,500

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Definitions:

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The highest level of executives and decision-makers in an organization who are responsible for determining strategy, direction, and policies.