When the Company Makes Money, It Can Choose to Distribute

question 85

Short Answer

When the company makes money, it can choose to distribute part of the profit to its shareholders.
This money is called a .

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced.

Fixed Costs

Costs that do not change with the volume of production, such as rent, salaries, or insurance.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, used to cover fixed costs and to generate profit.

Fixed Costs

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance premiums.