Contribution margin would be one of the most important measurements used in evaluating the performance of a
A) cost center.
B) profit center.
C) investment center.
D) organizational center.

Question

Quizplus · Accepted Answer

Contribution margin is a measure that indicates how much money is left over from sales revenue after accounting for variable costs, and it is typically used in profit centers where the goal is to generate profits. Cost centers are responsible for maintaining a certain level of activity or service, and investment centers are evaluated based on their overall profitability and return on investment. Organizational centers is not a recognized term in management accounting. Therefore, the most appropriate choice is B, profit center.

Contribution Margin Would Be One of the Most Important Measurements