The Contribution Margin Ratio Is Computed as

question 4

Multiple Choice

The contribution margin ratio is computed as

• A)sales divided by contribution margin
• B)contribution margin divided by sales
• C)contribution margin divided by cost of sales
• D)contribution margin divided by variable cost of sales

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net income or loss.

Net Income

The final earnings of a company after total revenue has had all taxes and expenses removed.

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or its operating cycle, whichever is longer.

Current Liabilities

Short-term financial obligations that are due within one year or within the entity's operating cycle.