The Contribution Margin Ratio

question 7

Multiple Choice

The contribution margin ratio:

• A)Is the percent of each sales dollar that remains after deducting the total unit variable cost.
• B)Is the percent of each sales dollar that remains after deducting the total unit fixed cost.
• C)Is the percent of each sales dollar that remains to cover the variable and fixed costs.
• D)Cannot be used in conjunction with other analytical tools.
• E)Is the same as the unit contribution margin.

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Definitions:

Firm Commitment Underwriting

A type of underwriting in which an underwriter commits to buying all the securities offered by the issuer and assumes full financial responsibility for any unsold securities.