A State of __________ Exists Whenever the Ratio of One

question 22

Short Answer

A state of __________ exists whenever the ratio of one person's outcomes to inputs equals the ratio of another's outcomes to inputs.

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Definitions:

Contribution Margin Ratio

The percentage of each sales dollar that contributes toward covering fixed costs and generating profit.

Fixed Monthly Expenses

Recurring expenses that do not change in amount from month to month, such as rent, salaries, and insurance premiums.

Net Operating Income

Income from operations after deducting operating expenses but before interest and taxes.

Variable Cost Per Unit

The cost that changes in proportion to the level of output or activity, calculated on a per-unit basis.