For a Given Level of Sales, a Low Contribution Margin

question 94

True/False

For a given level of sales, a low contribution margin ratio will produce more net operating income than a high contribution margin ratio.

---

Definitions:

Credits

Credits refer to a bookkeeping entry that increases a liability or equity account, or reduces an asset or expense account, reflecting the opposite side of a debit.

Assets

Assets are resources owned or controlled by a business, expected to bring future economic benefits.

Liabilities

Financial obligations or debts owed by a company to outside parties, including loans, accounts payable, and mortgages.

Credit Balance

Credit Balance refers to the amount of money a company owes to its customers, creditors, or depositors in their respective accounts.