Contribution Margin Information Is Not Relevant for

question 62

Multiple Choice

Contribution margin information is not relevant for

• A)the elimination of unprofitable segment decisions.
• B)pricing decisions for special orders.
• C)sales mix with resource constraint decisions.
• D)estimating the sales revenue for next period.

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Definitions:

Operating Assets

Assets that are used in the day-to-day operations of a business to generate revenue.

Return On Investment

A financial metric used to evaluate the efficiency of an investment, calculated as net profit divided by the cost of the investment.

Incentive Compensation

A form of performance-based pay where employees receive additional compensation for meeting or exceeding targets or metrics.

Balanced Scorecard

A strategic planning and management system used for aligning business activities to the vision and strategy of the organization, improving internal and external communications, and monitoring organizational performance against strategic goals.