Management Expects Total Sales of $40 Million,a Margin of Safety

question 103

Multiple Choice

Management expects total sales of $40 million,a margin of safety of $10 million,and a contribution margin ratio of 45%.Which of the following estimated amounts is not consistent with this information?

• A)Variable costs,$22 million
• B)Fixed costs,$13.5 million
• C)Operating income,$6 million
• D)Break-even sales volume,$30 million

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Definitions:

Maslow

An American psychologist who created the hierarchy of needs, a theory in psychology concerning human motivation based on prioritized needs.

Spontaneous

Occurring without apparent external cause; impromptu or unplanned.

Reproductive Payoffs

Benefits or advantages obtained through reproducing, often in the context of evolutionary biology, referring to the success of passing genes to the next generation.

Evolutionary

Pertains to the gradual process of biological change and development over successive generations.