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:

Partnership

A business structure where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Wrongful Dissolution

A partnership dissolution that violates the partnership agreement.

Partnership Agreement

A contract between partners in a business that outlines the business structure, distribution of profits and losses, and the terms for changes and dissolution.

Withdrawal

The act of removing oneself or stopping participation in an activity, agreement, or investment.