The Contribution Margin Ratio

question 191

Multiple Choice

The contribution margin ratio:

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

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Definitions:

Activity Base

This term is associated with cost accounting and refers to a measure of activity that is used as a basis for allocating costs to cost objects.

Number of Miles

The number of miles refers to the total distance measured in miles, often used in contexts such as travel, transportation, and delivery services.

Controllable Revenues

Income over which a business or manager has direct control, often affected by decisions on pricing and marketing.

Profit Centers

Parts of an organization that directly add to its profit through their activities, treated as separate entities for financial management purposes.