The Contribution Margin Ratio Is

question 75

Multiple Choice

The contribution margin ratio is:

• A) the same as the variable cost ratio
• B) the same as profit
• C) the portion of equity contributed by the stockholders
• D) the same as the profit-volume ratio

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Definitions:

Progressive

A system or policy where the level of contribution or effort increases with some measure of capacity, such as a progressive tax system where higher income earns pay a higher rate.

Proportional

Relating to or denoting a relationship where elements vary together at a constant rate and a change in one element results in a corresponding change in another.

Regressive

A term describing a tax system where the tax rate decreases as the taxable amount increases, placing a greater relative burden on lower income earners.

Form 1040EZ

A simplified tax form for individuals with uncomplicated tax situations, previously used to report income to the IRS.