The Systematic Examination of Differences Between Planned and Actual Contribution

question 125

True/False

The systematic examination of differences between planned and actual contribution margins is termed contribution margin analysis.

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Definitions:

Cycle Inventory

The portion of inventory available to meet normal demand during an ordering cycle.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price.

Cycle Inventory

The average amount of inventory kept on hand to meet normal demand between the receipt of inventory deliveries.

Physical Inventory

The process of counting and verifying actual merchandise or stock in a business, usually for accounting accuracy and inventory management.