-In the Above Figure, the Letters A, B, and C

question 344

Multiple Choice

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

• A) peak, expansion, and recession, respectively
• B) recession, expansion, and peak, respectively
• C) expansion, peak, and recession, respectively
• D) peak, recession, and expansion, respectively

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Definitions:

Contribution Margin Ratio

The ratio of Contribution Margin to Sales Revenue, measuring the percentage of each sales dollar available to cover fixed costs and profit.

Fixed Costs

Unvarying costs that do not fluctuate with changes in production or sales levels, such as office rent, staff wages, and insurance coverage.

Break-Even Point

The point where the amount produced or sold matches the overall expenses, leading to neither a profit nor a loss.

Contribution Margin

A profitability metric that calculates the amount of revenue remaining after deducting variable costs, used to cover fixed costs and generate profit.