Abrams Co Has Total Fixed Costs of $240,000 and a Contribution

question 61

Essay

Abrams Co. has total fixed costs of $240,000 and a contribution margin ratio of 40%. If rent expense increases by $5,000, how much will sales have to increase to cover this increase in costs?

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Definitions:

8-year-olds

A developmental stage for children characterized by significant cognitive, emotional, and social growth.

Sternberg

Refers to Robert Sternberg, a psychologist known for his theory on the triarchic theory of intelligence which includes analytical, creative, and practical components.

Practical Intelligence

The ability to solve everyday problems through the application of knowledge acquired from experience.

Analytical Intelligence

Part of Sternberg’s Triarchic Theory of Intelligence, focusing on the ability to analyze, evaluate, judge, compare, and contrast.