If Sales Total $1,000,000, Fixed Costs Total $200,000, and Variable

question 41

True/False

If sales total $1,000,000, fixed costs total $200,000, and variable costs are 55% of the sales, the contribution margin ratio is 55%.

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Definitions:

Net Cash Flow

The amount of cash that is generated or lost by a business in a given period, after accounting for all cash inflows and outflows related to operational, investing, and financing activities.

Statement of Cash Flows

The statement of cash flows is a financial report that outlines the cash inflows and outflows from operating, investing, and financing activities, indicating how a company generates and uses cash.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Depreciation Charges

The allocation of the cost of tangible assets over their useful lives, reflecting the decrease in value over time.