The Contribution Approach Is a Method of Internal Reporting That

question 86

True/False

The contribution approach is a method of internal reporting that emphasizes the distinction between variable and fixed costs for the purpose of better decision making.

---

Definitions:

Comparative Advantage

The capacity of a person, business, or nation to create a product or offer a service with a lesser opportunity cost compared to its rivals.

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Consumption

The use of goods and services by households or individuals.

Comparative Advantage

An economic theory stating that a country or individual can produce goods at a lower opportunity cost than their trade partners, leading to more efficient trade outcomes.