Which of the Following Observations Is True

question 91

Multiple Choice

Which of the following observations is true?

• A) Variable costs are irrelevant in the contribution-margin approach.
• B) Both the full-cost approach and the contribution-margin approach yield similar decisions.
• C) The contribution-margin approach ignores some costs to get results.
• D) Top management always prefers the contribution-margin approach.
• E) In the contribution-margin approach, all costs are allocated to products, customers, or other categories.

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Definitions:

Environmental Uncertainty

A lack of predictability or stability in the external conditions that can affect an organization's performance.

Resource Dependence

The dependency of organizations on environmental inputs, such as capital, raw materials, and human resources as well as outputs such as customers.

Environmental Uncertainty

The unpredictability that an organization faces due to external factors beyond its control, such as economic conditions or technological changes.

Dynamic Environment

A situation or place characterized by constant change, activity, or progress, which can affect individuals, businesses, or ecosystems.