The variable-cost ratio is
A) all variable costs divided by fixed costs.
B) net income divided by all variable costs.
C) fixed costs divided by all variable costs.
D) all variable costs divided by sales.

Question

Quizplus · Accepted Answer

The variable-cost ratio is calculated by dividing all variable costs by sales. It measures the proportion of each dollar of sales revenue that is consumed by variable costs.

The Variable-Cost Ratio Is