For the Convenience of the People Who Will Use the Bill

question 34

Multiple Choice

For the convenience of the people who will use the bill of materials, the MK Numbers ____.

• A) should be listed using standard abbreviations
• B) may be omitted since the entries are optional
• C) should be listed in order from smallest to largest
• D) are entered twice for verification purposes

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, highlighting the proportion of fixed costs in a company's cost structure.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, used to cover fixed costs and generate profit.

Fixed Costs

Expenses that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.

Contribution Margin Ratio

A financial metric that measures the proportion of revenue that exceeds variable costs, indicating how much of sales revenue is available to cover fixed costs and generate profit.