The contribution margin ratio is the
A) same as the variable cost ratio
B) same as profit
C) portion of equity contributed by stockholders
D) same as the profit-volume ratio

Question

Quizplus · Accepted Answer

The contribution margin ratio, which is calculated as (Sales - Variable Costs) / Sales, is essentially the same as the profit-volume ratio. It indicates the percentage of each sales dollar that contributes to covering fixed costs and generating profit.

The Contribution Margin Ratio Is the