In the Area of Cost-Volume-Profit Analysis,the Contribution Margin Ratio Shows

question 36

Multiple Choice

In the area of cost-volume-profit analysis,the contribution margin ratio shows how much each dollar of sales contributes to:

• A)Cover the fixed costs of the business and providing operating income.
• B)Fixed expenses and variable expenses.
• C)Variable expenses and interest charges.
• D)Variable expenses when production is at normal capacity.

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Definitions:

CCA Class

Refers to the classification of fixed assets under the Canadian Capital Cost Allowance for the purpose of tax depreciation.

After-Tax Lease Payment

The lease payment amount after accounting for the tax benefits or obligations, impacting the net cost to the lessee.

Tax Rate

The share of income an individual or business entity is required to pay in taxes.

CCA Class

A classification used in Canadian tax law for determining the depreciation rate for different types of tangible capital assets.