Read the Metric Dial (The Arrow near the Zero Indicates

question 143

Multiple Choice

Read the metric dial (the arrow near the zero indicates the initial deflection of the needle) .

• A) 3.17 mm
• B) -2.17 mm
• C) 2.17 mm
• D) 17.02 mm
• E) -2.83 mm

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Definitions:

Break-Even Sales

The amount of revenue needed to cover total costs, at which point a business neither makes a profit nor incurs a loss.

Margin of Safety

Represents the difference between actual or planned sales and the break-even sales, indicating the amount by which sales can drop before the business incurs a loss.

Contribution Margin Ratio

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

Variable Costs

Costs that vary in direct proportion to changes in levels of an activity or production volume.