Return on Investment Is Calculated by Dividing

question 2

Multiple Choice

Return on investment is calculated by dividing

• A) contribution margin by sales.
• B) controllable margin by sales.
• C) contribution margin by average operating assets.
• D) controllable margin by average operating assets.

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Definitions:

Break-Even Point

The level of production or sales volume at which total revenues equal total expenses, resulting in zero profit or loss.

Fixed Costs

Costs that do not fluctuate with the level of production or sales, such as rent and salaries.

Sales Mix

The ratio of various goods or services contributing to a company's overall sales.

Break-Even Point

The point at which total revenues equal total costs, and the business is neither making a profit nor incurring a loss.