Sales Mix Decisions Should Be Based on the Contribution Margin

question 9

True/False

Sales mix decisions should be based on the contribution margin per unit of scarce resource.

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Definitions:

Return on Assets

An indicator of how profitable a company is relative to its total assets, measuring the efficiency in using assets to generate earnings.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profitability.

Average Total Assets

The average value of all assets owned by a company over a specific period, useful in assessing company productivity and investment returns.

Net Sales

The total revenue from goods sold or services provided by a company, after deducting returns, allowances for damaged or missing goods, and discounts.