When TV Advertisements Report "2 Out of 3 Dentists Surveyed

question 36

Multiple Choice

When TV advertisements report "2 out of 3 dentists surveyed indicated they would recommend Brand X toothpaste to their patients," an informed consumer may question the conclusion because the:

• A) Sample was only 5 dentists.
• B) Sample of dentists is clearly explained.
• C) Advertisement does not include the total number of dentists surveyed.
• D) Conclusion is not illustrated with a graph.

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Definitions:

Contribution Margin

Contribution margin is the revenue remaining after deducting variable costs, used to cover fixed costs and profit.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Variable Costing

A pricing approach that incorporates only variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the cost of products.

Absorption Costing

A costing method that assigns all manufacturing costs, both fixed and variable, to products.