Value-Chain Analysis Can Only Be Applied to Manufacturing Operations

question 50

True/False

Value-chain analysis can only be applied to manufacturing operations.

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Definitions:

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, used to cover fixed costs and generate profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit; an important metric in understanding per unit profitability and in break-even analysis.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost Per Unit

The cost that varies with the level of output or activity and is typically assessed on a per-unit basis.