The Contribution Margin Ratio

question 98

Multiple Choice

The contribution margin ratio:

• A) Is the percent of each sales dollar that remains after deducting total unit variable cost.
• B) Is the percent of each sales dollar that remains after deducting total unit fixed cost.
• C) Is the percent of each sales dollar that remains to cover fixed costs and contribute to the managers' incomes.
• D) Cannot be used in conjunction with other analytical tools.
• E) Is the same as the unit contribution margin.

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Definitions:

Federal Budget Deficit

The financial situation when a government's expenditures exceed its revenues within a fiscal year, leading to borrowing or debt accumulation.

Inflation

The rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money.

Unemployment

The situation in which individuals who are capable of working and are looking for a job are unable to find employment.

Federal Debt

A stock variable that measures the net accumulation of annual federal deficits.