The larger the level of material costs as a proportion of total costs, the greater effect on profitability
of a reduction in material costs.

Name: The larger the level of material costs as a proportion of total costs, the greater effect on profitability of a reduction in material costs.
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Question

Quizplus · Accepted Answer

If material costs make up a larger proportion of total costs, then a reduction in those costs will have a greater impact on the overall expenses and thus on profitability.

The Larger the Level of Material Costs as a Proportion