A College Must Decide If It Wants to Offer More

question 144

True/False

A college must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of "what to produce."

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Definitions:

Contribution Approach

A managerial accounting method that separates fixed costs from variable costs to determine the contribution margin per unit and overall contribution towards fixed costs and profits.

Differential Cost

The difference in total cost that will result from selecting one alternative over another.

Contribution Margin

The difference between sales revenue and variable costs, indicating the amount available to cover fixed costs and generate profit.

Variable Administrative Expenses

Expenses within the administration sector that fluctuate with the level of business activity, like sales commissions.