If You Assume That Total Costs Represent a Constant Percentage

question 124

Multiple Choice

If you assume that total costs represent a constant percentage of sales, you are automatically assuming that the _________ is constant.

• A) Net income
• B) Profit margin
• C) Operating cash flow
• D) Dividend amount
• E) Retention ratio

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Definitions:

Plastic Resin

A solid or highly viscous substance of plant or synthetic origin that is typically convertible into polymers.

Resin Cost

The price associated with acquiring resin materials, which are often used in manufacturing processes for plastics and polymers.

Materials Purchases Budget

An estimation of the total cost of materials required for production, planned for a specific period.

Direct Labor

The cost of wages for employees who are directly involved in producing goods or providing services.