The contribution margin ratio can be used to
A)determine the increase in profits from a given dollar increase in sales revenue.
B)determine the impact of fixed costs on contribution margin.
C)both to determine the increase in profits from a given dollar increase in sales revenue and to determine the impact of fixed costs on contribution margin.
D)neither to determine the increase in profits from a given dollar increase in sales revenue nor to determine the impact of fixed costs on contribution margin.

Question

Quizplus · Accepted Answer

The contribution margin ratio helps in determining the increase in profits from a given dollar increase in sales revenue by showing the portion of sales that contributes to covering fixed costs and generating profit.

The Contribution Margin Ratio Can Be Used to