Which of the Following Types of Entities Would Not Fit

question 3

Multiple Choice

Which of the following types of entities would not fit the category of a profit-making entity?

• A) Sole proprietorship
• B) Partnership
• C) Charitable institution
• D) Company

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Definitions:

Contribution Margin Ratio

The percentage of sales revenue that remains after deducting variable costs, used to cover fixed costs and generate profit.

Variable Cost

Costs that change in proportion to the level of goods or services produced by a business.

Contribution Margin

The gap between the income from sales and variable expenses, which serves to offset fixed expenses and produce earnings.