This posting addressess contribution margins.
Statistics
July 9, 2019This posting addresses special order decisions.
July 9, 2019The choice of the absorption or contribution approach affects a firm’s contribution margin because _____.
a. contribution margin is higher if the contribution approach is used
b. contribution margin is lower if the contribution approach is used
c. contribution margin is independent of the approach
d. none of these answers is correct
Answer: (b) contribution margin is lower if the contribution approach is used
*The …
The solution explains the correct choice for why the choice of absorption or contribution approach affects a firm’s contribution margin. References are also provided.
