If a Product Sells for $20 and the Variable Costs

question 53

True/False

If a product sells for $20 and the variable costs are $14, then the per-unit contribution to fixed costs is $6.

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Definitions:

Net Profit Margin

A financial ratio representing the percentage of net income to sales revenue, indicating how much of each dollar earned by the company is translated into profits.

Return on Assets

A ratio indicating how efficiently a company is using its assets to generate profit, calculated as net income divided by total assets.

Earnings Per Share

A metric that divides a company's profit available to its common stockholders by the average outstanding shares.

Debt-to-Equity

A metric illustrating the comparative levels of a company's debt and shareholder equity utilized in asset financing.