Paxton Corp Has Provided the Following Data Concerning Its Operations

question 116

Multiple Choice

Paxton Corp has provided the following data concerning its operations last month:
$\begin{array} { | l | r | } \hline \text { Sales } & \$ 400,000 \\\hline \text { Variable expenses } & \$ 250,000 \\\hline \text { Fixed expenses } & \$ 100,000 \\\hline\end{array}$ Paxton Corp is a retailing organization.


-What is the contribution margin ratio?

• A) 12.5%.
• B) 33.0%.
• C) 25.0%.
• D) 37.5%.

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Definitions:

Ledger Accounts

Records that summarize the transactions related to a particular item over a period, creating a record of each financial transaction that takes place.

Transferred

The act of moving assets, funds, or rights from one account, location, or ownership to another.

Journals

Recorded chronological entries that detail all the financial transactions of a business, used as the initial place of record.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account.