If Total Sales Are $460,000, Total Variable Costs Are $138,000

question 131

Multiple Choice

If total sales are $460,000, total variable costs are $138,000, and total fixed costs are $184,000, the contribution margin ratio is:

• A) 70%
• B) 60%
• C) 40%
• D) 30%

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Definitions:

Materials Quantity Variance

The deviation found by multiplying the standard cost per unit with the difference in the actual and expected standard volumes of materials used in the production process.

Materials Price Variance

A financial measure used to determine the variation in the cost of raw materials against the pre-defined standard cost.

Raw Materials Inventory

The stock of basic materials that are to be used in production but have not yet been processed.

Cash Account

An account recording the transactions involving cash inflows and outflows.