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Reporting Contribution Margin by Market Segment Is Useful in Assessing

question 161

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Reporting contribution margin by market segment is useful in assessing the profitability of each segment.


Definitions:

Output

The total amount of goods or services produced by an individual, company, or country.

Total Variable Cost

The sum of all costs that vary with output level in the production process.

Marginal Cost

The augmentation in cost due to the manufacture of one additional unit of a product or service.

Total Variable Cost

The sum of all costs that vary with the level of output, including materials and labor directly involved in production.

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