The Unit Contribution Margin Tells How Much Each Additional Unit

question 85

True/False

The unit contribution margin tells how much each additional unit sold will contribute to covering variable costs.Unit contribution margin tells us how much each additional unit sold will contribute to the bottom line.

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Definitions:

Forgoing

The act of giving up or going without something, often in the context of making financial or investment decisions.

Discount

A reduction from the usual cost of something, or in finance, the process of determining the present value of future cash flows by applying a discount rate.

Minimum Compensating Balance

The lowest balance that a business must maintain in its bank account as a requirement for banking services or loans.

Line-Of-Credit

A financial arrangement in which a bank or other lender provides a maximum loan amount that the borrower can draw from as needed, but does not exceed over a specified period.