There Is an Important Relation Between Contribution Margin and Profit

question 112

Multiple Choice

There is an important relation between contribution margin and profit.Which of the following statements is not true?

• A)As the number of units sold rises,profit increases by the variable cost per unit.
• B)As the number of units sold increases,total contribution margin increases,but fixed costs remain the same.
• C)As the number of units sold rises,profit increases by the additional contribution margin per unit.
• D)As the number of

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Definitions:

Total Cost Transferred

The entire sum of costs that have been allocated from one department or process to another within an organization.

Processing Department

A specialized unit within a manufacturing facility where a specific type of processing or production stage is carried out.

Cost System

An accounting method used to track, record, and analyze costs associated with a company's operations, products, or services.

Cost Per Equivalent Unit

A calculation used in process costing that determines the cost allocated to each unit, considering the stage of completion.