The number of units, must be sold to earn targeted operating income are calculated by dividing the total fixed cost operating income and ____________?
Correct answer: D. contribution margin per unit
- A. marginal cost per unit
- B. variable cost per unit
- C. fixed cost per unit
- D. contribution margin per unit
Explanation
Target-profit units equal total fixed costs plus target operating income, divided by contribution margin per unit. Contribution margin, not variable cost alone, shows how much each unit contributes toward fixed costs and profit.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
The fixed budgeted manufacturing cost is $45000 and the budgeted production units are 900, then budgeted fixed manufacturing cost per unit will be ____________?
In an actual quantity of cost allocation used, base is multiplied to an actual fixed overhead rates, to calculate ___________?
The numerator of the fixed manufacturing cost rate is ___________?
The fixed direct manufacturing cost is calculated, by multiplying standard prices for standard quantity of allowed input for actual output in ___________?
The factors that affect the demand of the customers include __________?
In two of the methods of costing, the operating income will be different if the __________?