A Major Benefit of Using a Contribution Ratio Format Is

question 17

Multiple Choice

A major benefit of using a contribution ratio format is that

• A)it supports management's decision on its sales mix.
• B)it assists in determining the effect of sales on operating income.
• C)variable costs are isolated and can be easily reduced.
• D)it shows the impact of fixed costs on the sales mix.

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Definitions:

Bridge Capital

Temporary financing used to "bridge" the gap until longer-term funding can be arranged or until an anticipated event occurs, like a business sale.

Development Stage

A phase in a company's lifecycle focusing on developing its products, services, or business model, often requiring significant investment and carrying high risk.

Financial Know-How

The knowledge and skills related to managing finances, including budgeting, investing, and understanding financial markets and instruments.

Unanticipated Issues

Problems or challenges that arise unexpectedly and were not previously considered or planned for.