Something of Value That Is Exchanged as Part of an Agreement

question 29

Multiple Choice

Something of value that is exchanged as part of an agreement is called

• A) mutual assent.
• B) consideration.
• C) capacity.
• D) legal purpose.

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Definitions:

Contribution Margin Ratio

A measure that shows the percentage of sales revenue that exceeds the variable costs of production.

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as raw material costs, which vary with production volume.

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.