Which Is the Following Is the Most Appropriate Reason That

question 8

Multiple Choice

Which is the following is the most appropriate reason that sales mix decisions should be made using variable costing?

• A)All costs,including fixed costs,are controllable by upper management in the long run.
• B)To increase profits,businesses should emphasize the products with the highest contribution margin per unit.
• C)Sales mix decisions primarily focus on fixed costs.
• D)Fixed costs do not affect the operating income in the long run.

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Definitions:

Net Loss

A financial situation where the total expenses of a business exceed its total revenues, indicating a negative profit.

Income Summary

An account in which the revenues and expenses are summarized during the closing process, used to transfer net income or loss to owner's equity.

Net Income

The net income a company earns once all costs and taxes are deducted from its total revenues.

Rent Expense

Costs incurred from leasing property or equipment for business operations.