The Contribution Margin Ratio Is the Unit Contribution Margin Divided

question 21

True/False

The contribution margin ratio is the unit contribution margin divided by the sales price per unit.

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Definitions:

Variable Cost

A cost that varies with the level of output or production, such as materials or labor costs.

Fixed Cost

A cost that does not change with the level of production or sales over a certain period, such as rent or salaries.

Plane Operating Costs

The expenses associated with operating an aircraft, including fuel, maintenance, crew, and landing fees.

Variable Cost

A cost that changes in proportion with the level of output or activity.