A service company evaluates performance for the year: Revenue $2,000,000, variable costs $800,000, fixed costs $400,000, net profit $800,000.

• Requirements:
  • Apply the money measurement concept to analyze the financial performance of the service company.
  • Calculate the contribution margin ratio and break-even point.
  • Prepare a performance report using key financial ratios (profit margin, return on investment).
  • Discuss how the money measurement concept influences performance evaluation metrics.
  • Evaluate the reliability of financial statements in reflecting company performance under the money measurement concept.