In Incremental Analysis

question 137

Multiple Choice

In incremental analysis

• A) only costs are analyzed.
• B) only revenues are analyzed.
• C) both costs and revenues may be analyzed.
• D) both costs and revenues that stay the same between alternate courses of action will be analyzed.

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Definitions:

Unit Contribution Margin

The amount that the sale of one unit contributes towards covering fixed costs, calculated as the sales price per unit minus variable costs per unit.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Advertising Campaign

A series of advertisement messages that share a single idea and theme intended to achieve specific business objectives.

Contribution Margin Ratio

A measure of how a company's sales revenue contributes to covering its variable costs.