Reference no: EM13824027
1. A company has contribution margin per unit of $60 and a contribution margin ratio of 40%. What is the unit selling price?
$24.00
$100.00
$150.00
$0
2. Contribution margin
is always the same as gross profit margin.
excludes variable selling costs from its calculation.
is calculated by subtracting total manufacturing costs per unit from sales revenue per unit.
equals sales revenue minus variable costs.
3. What is contribution margin?
It is the amount of revenue remaining after deducting fixed costs.
It is available to cover fixed costs and contribute to income
It is sales less fixed costs.
It is the unit selling price less unit fixed costs.
4. Which statement is true when evaluating the margin of safety?
the break-even point is not relevant.
the higher the margin of safety ratio, the greater margin of safety.
the higher the dollar amount, the lower the overall margin of safety.
the higher the margin of safety ratio, the lower the fixed costs.
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