Variable Costs as a Percentage of Sales Are Equal to 100

question 168

True/False

Variable costs as a percentage of sales are equal to 100% minus the contribution margin ratio.

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Definitions:

Specific Performance

An equitable remedy requiring exactly the performance that was specified in a contract. Usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique, for example, real property.

Injunction

A court decree ordering a person to do or to refrain from doing a certain act.

Capital Asset Pricing Model

The Capital Asset Pricing Model (CAPM) is a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Nondiversifiable Risk

Risk that cannot be eliminated by investing in many projects or by holding the stocks of many companies.