Fixed cost is divided by break-even revenues to calculate
A. cost margin
B. fixed margin
C. revenue margin
D. contribution margin
Answer: Option D
Solution(By Examveda Team)
Fixed cost is divided by break-even revenues to calculate contribution margin. Contribution margin is a product's price minus all associated variable costs, resulting in the incremental profit earned for each unit sold. The total contribution margin generated by an entity represents the total earnings available to pay for fixed expenses and to generate a profit.Related Questions on Management Accounting
A. resourcing
B. value acquiring
C. production
D. value acquaintance
Examining of past performance, exploring alternative and planning future is
A. learning
B. alternating
C. examining
D. deciding
Time that a company takes to create and produce a new product is classified as
A. management factor
B. time factor
C. customer factor
D. chain factor
Purpose of management accounting is to
A. past orientation
B. help banks make decisions
C. help managers make decisions
D. help investors make decision
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