If Income Is Less Than Spending, You Have a Deficit

question 35

True/False

If income is less than spending, you have a deficit.

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Definitions:

Variable Component

The portion of cost or expense that varies directly with changes in output or activity level.

Pre-tax Income

Pre-tax Income is the amount of income earned by a business before any taxes have been deducted.

Contribution Margin

The sum by which the income from sales surpasses variable expenses, showing the extent to which revenue aids in covering fixed costs and generating profit.

High-low Method

A technique used in accounting and finance to estimate variable and fixed costs based on the highest and lowest levels of activity.