What is the ratio of fixed expenses to the contribution margin ratio?
A)the break-even point in sales
B)the break-even point in units
C)the variable cost ratio
D)the margin of safety

Question

Quizplus · Accepted Answer

The ratio of fixed expenses to the contribution margin ratio is the break-even point in sales. This is because the break-even point in sales dollars is calculated by dividing the total fixed expenses by the contribution margin ratio, which represents the portion of each sales dollar that contributes to covering fixed expenses after variable costs have been paid.

What Is the Ratio of Fixed Expenses to the Contribution