Once the Break-Even Point Has Been Reached,increases in Contribution Margin

question 62

True/False

Once the break-even point has been reached,increases in contribution margin will be reflected dollar for dollar in increased operating income.

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Definitions:

Income Summary

An account used in the closing process during the accounting cycle that summarizes the results of operations—revenues and expenses—before transferring the net income or loss to the owner's equity.

Revenue

The total amount of money generated by the sale of goods or services related to a company's primary operations before any expenses are deducted.

Expense Accounts

Expense accounts are used in accounting to track money spent or costs incurred in a company's operations.

Retained Earnings

Earnings not paid out as dividends but instead reinvested in the company or used to pay off debt.