By separating costs by behavior,fixed and variable,a service company can calculate the contribution margin ratio by dividing the contribution margin by revenues.

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Quizplus · Accepted Answer

This statement is true. By separating costs into fixed and variable categories, a service company can calculate the contribution margin for each unit of service provided. The contribution margin is then divided by revenues to find the contribution margin ratio.

By Separating Costs by Behavior,fixed and Variable,a Service Company Can