Contribution Margin Can Be Expressed on a Per Unit Basis

question 102

Multiple Choice

Contribution margin can be expressed on a per unit basis as

• A) the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
• B) the sum of the expenses of the firm that change with the quantity of a product that is produced and sold.
• C) the difference between unit selling price and unit variable cost.
• D) the average amount of money received for selling one unit of a product or simply the price of that unit.
• E) the change in total cost that results from producing and marketing one additional unit of a product.

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Definitions:

Centralized Business

An organizational structure where decision-making and key processes are managed at the highest levels or from a single central location or headquarters.

Operating Decisions

Choices made by management regarding daily operations of a business that affect its efficiency and effectiveness.

Top Management

The highest level of management in an organization, responsible for making strategic decisions.

Decentralization

The distribution of decision-making powers from central authority to individuals or units at lower levels within an organization or state.