Week 9 - Cost Volume Profit Analysis III Flashcards
1
Q
What does it mean if a company breaks even?
A
Their costs exactly equal their income
2
Q
What is the contribution margin ratio?
A
The difference between a company’s sales and variable costs, expressed as a percentage of sales
3
Q
What is the formula for the CM ratio?
A
CM ratio = (CM / sales) x 100
