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) determining the amount that sales exceeded fixed costs.

Question

Quizplus · Accepted Answer

Contribution margin information is useful in determining the amount that sales exceeded fixed costs, but it is not relevant for the other options listed. For example, in order to eliminate unprofitable segment decisions or make sales mix decisions, other factors such as direct expenses or resource availability must also be taken into consideration. Pricing decisions for special orders may require additional considerations such as capacity utilization, material costs, and product differentiation, which contribution margin alone cannot provide.

Contribution Margin Information Is Not Relevant for