In deciding which responsibility centers can benefit most from short-term marketing efforts, such as advertising specific products, management should give greatest consideration to the relationship between a center's sales and:
A) Traceable fixed costs.
B) Income from operations.
C) Contribution margin.
D) Responsibility margin.

Question

Quizplus · Accepted Answer

When deciding which responsibility centers can benefit most from short-term marketing efforts, management should give greatest consideration to a center's contribution margin. Contribution margin represents the amount of revenue left over after deducting variable costs, and is a key indicator of a center's profitability. By focusing on centers with high contribution margins, management can identify areas where short-term marketing efforts are most likely to generate additional revenues and profits. While traceable fixed costs, income from operations, and responsibility margin are all important metrics to consider, they do not provide the same level of insight into a center's profitability as contribution margin.

In Deciding Which Responsibility Centers Can Benefit Most from Short-Term