The Weighted-Average Contribution Margin Is Computed by Multiplying Each Product's

question 108

True/False

The weighted-average contribution margin is computed by multiplying each product's unit contribution margin by the sales mix percentage of each product.

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Definitions:

Activity-Based Costing

A costing methodology that assigns expenses to products and services based on the activities that go into producing them.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including costs associated with running the factory such as utilities and maintenance.

Overhead Cost

Expenses related to the operation of a business that are not directly tied to a specific product or service, such as utilities and rent.

Activity-Based Costing

A method of costing that identifies the relationship between costs, activities, and products, and through this relationship assigns indirect costs to products less arbitrarily than traditional methods.