The Higher the Contribution Margin, the Lower the Financial Break-Even

question 284

True/False

The higher the contribution margin, the lower the financial break-even point.

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Definitions:

Machine Hours

A measure of production time, calculated by counting the number of hours that machinery is operating in the production of goods.

Raw Materials

The basic substances or components that are processed or combined to manufacture finished goods.

Journalize

The process of recording financial transactions in a company’s accounting records, or journal, in chronological order.

Units

A measurement of quantity, such as items, hours, or other measures, used in the organization or operation of businesses.