If Sales Total $5,000,000, Fixed Costs Total $400,000, and Variable

question 112

True/False

If sales total $5,000,000, fixed costs total $400,000, and variable costs are 2,750,000, the contribution margin ratio is 45%.

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Definitions:

Financial Statements

Formal records that outline the financial activities and conditions of a business, including the balance sheet, income statement, and cash flow statement.

Accuracy in Accounting

The principle that ensures financial records and statements are free from errors or discrepancies and faithfully represent the financial performance and position of an entity.

Operating Activities

Business activities directly related to the production, sales, and delivery of a company's products and services, reflected in its cash flow.

Investing Activities

Part of cash flow from investing, representing transactions related to the acquisition or disposal of long-term assets and investments other than inventory.