Operating Income Is Determined by Deducting All Fixed Costs Related

question 152

True/False

Operating income is determined by deducting all fixed costs related to production,selling,and administration from contribution margin.

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Definitions:

Quick Ratio

A liquidity measure that indicates a company's ability to pay its current liabilities without relying on the sale of inventory, calculated as (current assets - inventory) / current liabilities.

Marketable Securities

Financial instruments that can be easily bought or sold on public stock exchanges or other financial markets.

Accounts Receivable

Amounts due from customers for goods or services provided by a firm, yet to be paid.

Common-sized Income Statement

An income statement in which each line item is expressed as a percentage of sales revenue, allowing for easy comparison across periods or companies by standardizing the scale.