The Impact on Net Operating Income of a Small Change

question 320

Multiple Choice

The impact on net operating income of a small change in sales for a segment is best predicted by using:

• A) the contribution margin ratio.
• B) the segment margin.
• C) the ratio of the segment margin to sales.
• D) net sales less segment fixed costs.

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Definitions:

Franchisees

Individuals or entities that acquire the rights to operate and sell a franchisor's products or services within a certain territory.

Proven Product

A product that has been demonstrated to meet customer expectations and achieve market success through sales performance and customer acceptance.

Product Distribution

The process of making a product available for consumption by dispersing it through the market.

Trade Name

The name under which a business operates and is known to the public, differing from the legal name of the business.