Ace Corporation's Variable Costs Are Equal to 43% of Sales

question 61

Multiple Choice

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the contribution rate.

• A) 22%
• B) 34%
• C) 43%
• D) 53%
• E) 57%

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Definitions:

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company.

Cash Collections

The total amount of money received by a company from its various activities, including sales, services, and financing, over a specific period.

Cost of Goods Sold

Costs directly associated with manufacturing goods a company sells, such as materials and labor expenses.