If Sales Are $820,000, Variable Costs Are 45% of Sales

question 4

Multiple Choice

If sales are $820,000, variable costs are 45% of sales, and operating income is $260,000, what is the contribution margin ratio?

• A) 45%
• B) 55%
• C) 62%
• D) 32%

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Definitions:

Bankruptcy Relief

Legal protection granted to individuals or entities that are unable to repay their debts, allowing them to restructure or eliminate obligations under the supervision of a bankruptcy court.

Chapter 7

A type of bankruptcy under U.S. law that involves liquidating a debtor's assets to repay creditors.

Chapter 11

A provision of the United States Bankruptcy Code that allows businesses to reorganize their debts and continue operating.

Chapter 13

A section of the U.S. bankruptcy code allowing individuals earning regular income to develop a plan to repay all or part of their debts.