Under the Contribution Approach,variable Selling and Administrative Expenses Are Used

question 25

Multiple Choice

Under the contribution approach,variable selling and administrative expenses are used to calculate ________.Under the absorption approach,variable selling and administrative expenses are used to calculate ________.

• A)contribution margin; operating income
• B)gross margin; operating income
• C)contribution margin; gross margin
• D)gross margin; contribution margin

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Definitions:

Market Power

The ability of a company or entity to influence the price or quantity of goods or services in the market.

Raise Price

The act of increasing the price at which goods or services are sold, often in response to market conditions or increased costs.

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Individual Producer

A single entity or person involved in the production of goods or services.