The Dollar Amount by Which Sales Can Decline Before an Operating

question 113

Multiple Choice

The dollar amount by which sales can decline before an operating loss is incurred is called the:

• A)Contribution margin.
• B)Contribution margin ratio.
• C)Margin of safety.
• D)Relevant range.

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Definitions:

Bank

A financial institution licensed to receive deposits and make loans, and offer other financial services, such as wealth management and currency exchange.

Float Balance

The amount of money within a financial system that is briefly counted twice due to time gaps in registering a deposit or withdrawal, often seen in the banking system.

Ledger Balance

The balance of a bank account at the start of each day, including all deposits and withdrawals that have been posted to the account.

Miller-Orr Model

A model used to manage cash balances by setting upper and lower limits on cash reserves, triggering transfers to optimize interest and liquidity.