Please calculate the profit contribution as a percentage of sales to be used in the ROAM calculation, if sales = $20,000,000; accounts receivable = $8,000,000; and profit contribution = $5,000,000:
A) 20 percent.
B) 40 percent.
C) 50 percent.
D) 5 percent.
E) 25 percent.

Question

Quizplus · Accepted Answer

Profit contribution as a percentage of sales is calculated by dividing the profit contribution by sales and then multiplying by 100. So, $5,000,000 / $20,000,000 * 100 = 25%.

Please Calculate the Profit Contribution as a Percentage of Sales