Final answer:
The equation X = Sales - [(CM/Sales) x (Sales)] represents the calculation of contribution margin, which is the amount left over from sales revenue after subtracting the variable costs associated with producing and selling the products. By subtracting the contribution margin from the sales, we can calculate how much is left as a contribution towards covering the fixed costs and generating net income.
Step-by-step explanation:
The equation X = Sales - [(CM/Sales) x (Sales)] represents the calculation of contribution margin.
The contribution margin is the amount left over from sales revenue after subtracting the variable costs associated with producing and selling the products.
By subtracting the contribution margin from the sales, we can calculate how much is left as a contribution towards covering the fixed costs and generating net income.