Managers Can Quickly Forecast the Total Contribution Margin by Multiplying

question 236

Multiple Choice

Managers can quickly forecast the total contribution margin by multiplying the projected

• A) sales revenue by the contribution margin ratio.
• B) sales units by the contribution margin ratio.
• C) sales revenue by the unit contribution margin.
• D) sales units by the variable cost ratio.

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Definitions:

Increase

A rise or growth in quantity, size, number, or some other measure.

Inelastic Demand

A situation where the demand for a good or service is not significantly affected by changes in its price.

Downward-Sloping

A term often used to describe demand curves, indicating that as the price decreases, the quantity demanded increases.

Linear Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, characterized by a consistent negative slope.