The Portion of an Asset's Sale Price That Is Below

question 37

Multiple Choice

The portion of an asset's sale price that is below its book value and below its initial purchase price is called ________.

• A) a capital gain
• B) recaptured depreciation
• C) a capital loss
• D) book value

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Definitions:

Contribution Format

An income statement format that separates fixed and variable costs, facilitating analysis of the impact of sales volume on profit.

Unit Contribution Margin

The amount that the sale of one unit contributes toward covering fixed costs and then to profit, calculated as the selling price per unit minus the variable cost per unit.

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue remaining after variable costs are subtracted, indicating how efficiently a company can produce and sell products.

Break-even Point

A point where total cost and total revenue are equal, indicating no profit or loss and where production or sales start becoming profitable.