Which of the Following Formulas Is Used to Calculate the Contribution

question 64

Multiple Choice

Which of the following formulas is used to calculate the contribution margin ratio?

• A) (Sales − Fixed costs) ÷ Sales.
• B) (Sales − Cost of goods sold) ÷ Sales.
• C) (Sales − Variable costs) ÷ Sales.
• D) (Sales − Total costs) ÷ Sales.

---

Definitions:

Licensing Agreement

A legal contract permitting one party to use another's intellectual property, products, or branding under defined conditions.

Patent Expires

The termination of patent protection for an invention, allowing it to enter the public domain for unrestricted use.

Precedents

Legal cases or decisions that have been established in the past and provide an example or rule to guide the determination of similar cases in the future.

Class Actions

Legal proceedings where a group of people with similar grievances against the same defendant are represented collectively.