If Sales Are $425,000, Variable Costs Are 62% of Sales

question 123

Multiple Choice

If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, what is the contribution margin ratio?

• A) 38%
• B) 26.8%
• C) 11.8%
• D) 62%

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Definitions:

Capital Market Expectations

The forecasted future returns, volatilities, and correlations for the major asset classes, which are essential for the strategic asset allocation process.

Investment Objectives

Define the financial goals and strategies of an investor or an investment fund.

Risk

The potential for loss or unfavorable outcomes in any given situation, often assessed in finance as the variability of returns on investments.

Return

Return refers to the gain or loss on an investment over a specific period, including income received and the change in value, usually expressed as a percentage of the investment’s initial cost.