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:

Chemical Induction

The initiation or increase of a process or action in a biological system by a chemical substance.

RAS

Stands for Reticular Activating System, a network of neurons located in the brainstem that is responsible for regulating wakefulness and sleep-wake transitions.

Neurons

Nerve cells that are the basic structural and functional units of the nervous system, responsible for transmitting messages throughout the body.

Caffeine

A stimulant found in coffee, tea, and various beverages and medications, known for enhancing alertness and reducing fatigue.