A Firm's Products Have an Average Contribution Margin Ratio of 40

question 54

Multiple Choice

A firm's products have an average contribution margin ratio of 40%, which will be maintained for the next month even though fixed expenses are expected to rise by $20,000.In order to keep operating income for the month from being affected, revenues will have to increase by:

• A)$8,000.
• B)$12,000.
• C)$20,000.
• D)$50,000.

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Definitions:

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Legal agreements by which a bank or creditor lends money at interest in exchange for taking title of the borrower's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

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A legal right granted by a government that gives an inventor exclusive rights to make, use, sell, and distribute their invention for a defined period of time.

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