Match each following terms with their correct description from the items listed below.
-Sales revenue minus total variable cost or sales price minus unit variable cost

Question

Quizplus · Accepted Answer

Contribution margin is the sales revenue minus total variable cost or sales price minus unit variable cost.

Answer: A 
 Break-even point is the level of sales at which a company neither earns a profit nor incurs a loss.

Answer: D 
 Direct fixed expenses are expenses that can be directly linked to a specific product or service.

Answer: B 
 Common fixed expenses are expenses that cannot be directly linked to a specific product or service.

Answer: E 
 Margin of safety is the excess of actual or expected sales over the break-even sales.

Answer: F 
 Operating leverage is the extent to which fixed costs are used in the production process.

Answer: G 
 Degree of operating leverage is the percentage change in operating income relative to the percentage change in net sales.

Answer: H 
 Sales mix is the relative proportion of units sold of each product in a multi-product company.

Match Each Following Terms with Their Correct Description from the Items