$3\mathrm{.}33/3\mathrm{.}33$points awarded

ItemScored

Item $6$

Which of the following statements is true?

In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be lower in the company with a higher proportion of fixed expenses in its cost structure.

For a given level of sales, a low contribution margin ratio will produce more net operating income than a high contribution margin ratio.