Constant Demand,constant Carrying Costs,and Constant Ordering Costs Are the Three

question 82

True/False

Constant demand,constant carrying costs,and constant ordering costs are the three key assumptions of the EOQ model.

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Definitions:

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, essentially calculating the portion of sales available to cover fixed expenses.

Margin Of Safety

The difference between actual or expected sales and the sales level at which the business breaks even, indicating the risk level of not covering fixed costs.

Margin Of Safety Percentage

A financial metric that indicates the degree to which a business's sales can decline before it reaches the break-even point.

Net Operating Income

A financial metric that calculates a company's operational profit by subtracting operating expenses from operating revenues.