Identify the Truthfulness of the Following Statements: I

question 27

Multiple Choice

Identify the truthfulness of the following statements: I. Marginal analysis can explain why you would always choose to eat Chinese food rather than pizza.
II. Marginal analysis can explain the incremental impact of an increase in total cost when one more unit of output is produced.

• A)Both I and II are true
• B)Both I and II are false
• C)I is true; II is false
• D)I is false; II is true

Calculate the contribution margin for a department.

Allocate building and utility costs to departments based on specified criteria.

Understand the concept and calculation of contribution margin and net income.

Grasp the effects of department elimination on overall company financials.

---

Definitions:

Financial Ratios

Financial ratios are quantifiable measures used to evaluate a company's financial performance by comparing two line items from financial statements.

Industry

A category of businesses that produce or sell similar products, services, or are involved in the same level of economic activity.

Operating Activities

Business actions directly involved in the production and delivery of goods and services, as reflected in the cash flow statement.

Current Accounts

A type of demand deposit account that allows withdrawals and deposits, typically used by businesses for their frequent money transactions.