Asked by
Alexander Khalil
on Nov 17, 2024Verified
Which of the following ratios indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?
A) margin of safety ratio
B) contribution margin ratio
C) costs and expenses ratio
D) profit ratio
Contribution Margin Ratio
The percentage of each sales dollar that remains after variable costs are subtracted, contributing to covering fixed costs and profit.
Margin Of Safety Ratio
A financial metric that indicates how much sales can decline before a business reaches its break-even point.
Costs And Expenses Ratio
A financial metric that compares the costs and expenses of a company to its total revenue, indicating the efficiency of its operations.
- Employ the principles of cost-volume-profit analysis in business decision-making processes.
- Analyze and apply methods related to the contribution margin and its effect on earnings.
Verified Answer
HT
Learning Objectives
- Employ the principles of cost-volume-profit analysis in business decision-making processes.
- Analyze and apply methods related to the contribution margin and its effect on earnings.