Which Ratio Indicates the Percentage of Each Sales Dollar That

question 136

Multiple Choice

Which ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

• A)Margin of safety ratio
• B)Contribution margin ratio
• C)Costs and expenses ratio
• D)Profit ratio

---

Definitions:

State Regulations

State regulations are legal requirements established by individual states that govern the operation of businesses, aiming to protect the public interest.

Corporations

Legal entities that are separate and distinct from their owners, providing limited liability protection, and have the ability to raise capital through the issuance of stocks.

Proprietorships

Proprietorships are businesses owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Partnerships

A legal form of business operation between two or more individuals who share management and profits.