What Is the Purpose for Determining Contribution Margin

question 117

Multiple Choice

What is the purpose for determining contribution margin?

• A) To show the contribution by department toward covering indirect costs
• B) To help determine whether or not to eliminate a department
• C) To show the effect on net income for each department
• D) All of these answers are correct.

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Definitions:

ERP Systems

Enterprise Resource Planning systems integrate various functions across an organization into a unified database to streamline processes and information across the organization.

TPSs

Transaction Processing Systems, computerized systems that perform and record the daily routine transactions necessary to the operation of a business.

TPSs

Computerized systems crucial for conducting and recording business transactions efficiently, specifically designed to handle user transactions and operations in real-time to ensure data integrity and processing reliability.

ERP Systems

Enterprise Resource Planning Systems integrate various functions like finance, HR, manufacturing, and supply chain into a unified system to streamline processes and information across the organization.