How Do Controllable Margin and Contribution Margin Differ

question 49

Multiple Choice

How do controllable margin and contribution margin differ?

• A)The amount of the controllable margin is larger than contribution margin.
• B)The amount of the contribution margin is usually higher than the controllable margin.
• C)They are synonymous terms.
• D)Controllable margin is used for profit centres, while contribution margin is used for cost centres.

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Definitions:

Cash

A current asset account that represents currency or currency equivalents that can be accessed immediately or near-immediately.

Sales

The total amount of revenue generated from selling goods or services.

Perpetual Inventory System

A method used by businesses to keep a real-time record of inventory levels, constantly updating with every sale and purchase.

Merchandise Inventory

Goods that a company holds for the purpose of selling them to customers.