Because Contribution Margin Is Based on Sales Price and Variable

question 145

True/False

Because contribution margin is based on sales price and variable costs,the contribution margin ratio can be calculated using either the total amounts or the unit amounts.

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Definitions:

Taxable Income

Taxable income is the portion of an individual's or company's income used as the basis to calculate the taxes owed to the government.

Average Tax Rate

The ratio of the total amount of taxes paid to the total taxable income, indicating the portion of income that is paid in taxes.

Marginal Tax Rate

The tax rate that applies to the last dollar of the taxpayer's income, indicating the percentage of tax paid on any additional income earned.

Taxable Income

The portion of an individual or entity's income used as the basis to calculate how much the individual or entity owes in taxes.