Which of the Following Is the Correct Calculation for the Contribution

question 36

Multiple Choice

Which of the following is the correct calculation for the contribution margin ratio?

• A)Sales revenue divided by variable costs.
• B)Sales revenue divided by contribution margin.
• C)Contribution margin divided by sales revenue.
• D)Contribution margin divided by variable costs.

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Definitions:

General Partnership

A business structure where two or more individuals agree to share in all assets, profits, and financial and legal liabilities of a venture.

Participating Investors

Individuals or entities that engage in funding ventures with the expectation of earning a return on their investment.

Liability

The state of being responsible for something, especially by law.

Duty of Loyalty

A legal obligation requiring directors, officers, and agents of a corporation to act in the best interest of the corporation.