Calculate the Ratio of Variable Costs to Sales for a Firm

question 22

Multiple Choice

Calculate the ratio of variable costs to sales for a firm with a $3 million accounting break-even revenue point,$1.2 million fixed costs,and $450,000 depreciation.

• A) 40%
• B) 45%
• C) 55%
• D) 60%

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Definitions:

Annual Interest Rate

The percentage of interest that will be charged or earned on an amount of money over the span of a year.

Deposit

Money placed into a financial institution for safekeeping, which can also earn interest depending on the type of account.

Semiannually Compounded Rate

An interest rate that is compounded twice a year, affecting the total amount of interest earned or paid.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the loan amount.